Hi, everyone! Welcome to our Live AMA session. A lot of things have happened since we last got a chance to speak and some of the things were great, like hitting the 3 million users milestone. Some of the things were not so great, such as the Wirecard fiasco that required quite a lot of attention from all of us at Crypto.com. And of course, we always deliver a lot of improvements on the product and platform.

But I understand that today, the one topic everyone wants to focus on is the announcement that we have made yesterday about the MCO Swap. So my approach is to address this head-first, to give you the context of why we have done it and also to address two key issues that the community has highlighted, since we announced yesterday. Then we will move to a list of 40 questions that you guys submitted and I'll go through them one by one. So for the guys who are only interested in the swap stuff: you can just focus on the beginning of this AMA.

So first of all, let's talk about the context. And why is this swap happening?

Essentially, it's about Crypto.com getting fully regulated as a business. And the regulatory environment in the last few years has changed dramatically. And how we approach this is, we invest in local operations, in every key jurisdiction: staff with strong compliance teams, and we've already applied for a number of licenses and more are in progress.

Part of this is managing regulatory compliance risk. And it so happens that in our industry, ICO tokens are on one end of the spectrum in terms of regulatory compliance risk, and you could argue that Bitcoin is on the opposite side. So in order to manage these risks, practically, we can't rewrite history. We did an ICO in 2017. But we can't have an ICO token perform core functions on our platform as we grow, as we get licensed, as we get regulated in all key jurisdictions around the world.

And that's the context of the decision. We believe that this is the right way to move forward. And we take a very long-term view. We think that, while this is a decision that is not particularly popular, as I gather from the field that we collected in the last 24 hours. It was not an easy one, because it impacts everybody. But it's the right thing to do for the long term.

Now, in terms of the two key issues that were brought up by the community-- and you guys were extremely vocal about it. I have to say that while we see that a vast majority of our users on the platform already performed the swap, there are a number of people who are not particularly happy about it, and the reason is the swap rate. So I want to walk you through my thinking on this particular area. And we typically don't discuss price at all. But it's very hard to avoid this in this context.

So, if you guys recall yesterday at the moment of the announcement, if you combine the 20% bonus that we offered and a 30 day VWAP that was the basis for the price calculation for the swap rate, the premium versus market price is around 35%.

Now, the market works as follows: the guys who do arbitrage understand that there is this dislocation in value and the arbitrage it up until there's an equilibrium in price. So one way to look at this 35% premium is that if you compare the market cap of MCO at the moment of the announcement at around $60-$62 million and 35% premium— that equals to a $22m cost to perform the swap for the company, assuming of course, that all token holders perform the swap.

Now, if you look at the numbers again, that would mean essentially that the cost of the swap will increase from $22 million to almost $200 million. And that's just not feasible. We are a four year old company. We have raised as you guys know, $26.7 million in 2017. This year is going to be the first year when we're actually profitable as a business, which in itself is a great achievement, but we are not in a position to take on a cost of $200 million, it's just absolutely not feasible. So everybody needs to keep this in mind because there is a cost to this and somebody has to pay it right?

A good comparison to kind of, realize how difficult it will be, is that this is essentially like buying $20 million of Bitcoin at $45,000 BTC. Or $200 million dollars of Ethereum at $1,600 per ETH. It's just absolutely not feasible. So, we just can't do it. And we've tried our best to make sure that we do it right by the community. There are limits to what can be done.

Now the second item that was raised very frequently and is a key concern as there are new staking levels to secure our visa cards. As you guys know, those were substantially higher. So while we can't do anything with the swap rate, we can address this key concern for the community. We have three years of history listening to your feedback and we always try to improve our platform and the offering.

So what we are going to do is as follow: We are going to reduce the staking requirements for CRO to receive cards to 1000 CRO for the Ruby Steel card, 10,000 CRO for the Royal Indigo and Jade Green cards, 100,000 CRO for Icy White and Rose Gold cards and 1 million CRO for the Obsidian.

You guys are excellent, so I don't have to tell you that this essentially means a 20% reduction in the USD costs of each card staking level across the board. So I think it speaks volumes to the fact that we understand your needs, we understand your worries and we address them when and wherever we can.

One final thing is that, because of this year's price difference, some of our users will have an extra CRO balance that is more than the required minimum. We are going to work with our tech team to make sure that those are credited to users wallets, although it's going to be a manual exercise so it will take us a while.

And finally, on this point, the team is already working on it and it's going to go live today. So the new Card staking requirements are going to be live today. So I hope to address this as a community. And again, as a company, we view our global community as an absolutely key part of our growth strategy, building our brand, and driving the global adoption.

So we listen to you guys, we do what we can, some things we can do, some things we can't. It's just the way it is. I'm going to move forward to the list of questions and go through all 40. Some of this might be a bit repetitive, so I apologize for that. But we just want to do this for the sake of completeness.

So on the MCO Swap Program there are a few questions:

MCO Swap Program

For the old MCO Visa Cards, the cost of stake was almost four times less. Why are you increasing the barriers for entry?
So we heard this feedback and we just reversed this course. And we're reducing the barriers to entry if anything. And that's happening today. So if you're staking for the card this evening, you'll be able to do it on those new tiers.

The new card staking requirements are far more expensive than what you would receive by swapping MCO to CRO. How do you justify this move to existing users?
We don’t justify, we fix it.

Are there any perks in the making since the price for the cards has drastically increased?
We have some perks in the works, but again, the price (of the cards) will not increase.

How will our investors be compensated now that MCO has been revoked? Will there be preferential rates added for the MCO to CRO swap?

We just can't do this. This is one swap rate for everybody. I think that's the only fair way to do it. In terms of using the word compensation, I think it has to be stressed that the entire utility of the token is preserved and represented with the CRO token. So there is no reason to do it.

What is the reason to use a 30 day average for the MCO spot rate when it's the lowest in history? You should have used six to 12 months average, which is harder to manipulate, you will see that it's come out at about one to 100 ratio. Please explain.

So I haven't seen anybody doing any kind of swaps in the crypto industry based on a one year VWAP. Part of this is probably because there is gigantic volatility in this market. So that wouldn't simply be feasible. We think that This actually already quite a lengthy process, it's not 24 hours, three days or seven days, as you would typically see and hear. So there were billions of dollars traded above coins in the VR period. So I think it accurately represents and thoroughly represents the value. And again, it doesn't come without a cost of the company, and the one to 100 ratio simply, it's just not feasible. So we can’t do this.

Depending on the country, the MCs euro swap would be a taxable event. Do you realize that this will trigger capital gains taxes?

So on this round, everybody needs to talk to their own tax advisor that understands local rules and regulations. And we need to make the decisions based on the advice that they're given. That's one of the reasons why we've extended the swap period for 90 days so that everybody has enough time to do their homework and make those decisions in a conscious manner.

There's always two options. You don't have to do the swap, you're free to withdraw the tokens and you can sell them in the market, if that's your preferred choice, so you can just keep it but

but everybody needs to make their own decisions. And we are providing ample time for everybody to decide.

Are there two different CRO stakes now? Does this make sense at all? It's already hard enough to upgrade the card. Am I going to need all of my CRO stakes on the app?

So this is the first version of the staking tree. We just announced that we're going to fix the card staking. We will continue to iterate on this until it makes perfect sense end to end so that we don't have this separation.

Why is the stake reset date set to 180 days on the Exchange if we swap MCO?

And that's the limitation of our platform we don't have at this moment, the ability to track it multiple times. So there's just one way to deal with it.

What is going to happen to the referral bonuses, if not unlocked yet?

We will just pay those in CRO.

What will happen to MCO Private, in particular the 2% MCO interest that was previously paid?

That will be paid in CRO.

Will we be able to top up the card with CRO?

This one is slightly more complicated because it's not only dependent on our facilities, but also those of the card issuers. So we need to secure relevant approvals. As you guys know, we are now in the process of changing our issuing partner both in Asia and in Europe. So we will have to wait for this to happen. And essentially, once we secured those approvals, we will be just fine to approve this.

Explain the details of the whitelabel program, and how is it affected by the MCO Swap?

The whitelabel program is not affected at all, and we are still working on it full speed.One of the prerequisites for this to go live is for us to secure partnerships with these teams directly. So this is already work in progress.

As many customers have been upset with the announcement of the swap yesterday, what would you like to say to reassure us?

Again, as I mentioned in the beginning, I want you guys to understand the context where the industry is going, it's going to be a fully regulated market, where the company is going, we are going to be a fully regulated business in all key jurisdictions, and there's just no space for high risk instruments. We need to do everything that we can to reduce our business risk, because being fully compliant is the only way to go.

If you want to be able to serve 10s of millions of customers on the platform. And I think it's better that we transparently go about it. Here's what we can do, here's what we can't do. And everybody can make up their own mind. The company just turned four, we have a long history of delivering improvements or building products that people love. And we have a very important mission to drive the adoption of crypto. So we will do this and we will continue doing this. We've got our 500 people in the company that are working day and night making this happen, and building better services that you guys can use. And I think none of this should be sacrificed at the altar of price.

The price today, in perspective of what is right or what is wrong is one thing, but I encourage everybody to take a longer term view of what the company is building. What are we doing as a team? And perhaps if you need to judge what you're doing, judge it a year from now, two years from now, three years from now, I think in that time, it's going to be much more clear whether this was the right decision or not.

Now, onto the second section about CRO and MCO.


Does the MCO swap affect the mainnet for CRO because it said Q3 for this year, so is this still as planned?

Actually, we are targeting the mainnet launch for the end of this year. So the MCO swap is going to finish in November and our target for the mainnet is December. I think everybody needs to understand that the mainnet launch is incredibly important as we move on the spectrum of regulatory risk from on one side an ICO token to on the other side Bitcoin-- launching the mainnet, using the token to power the entire ecosystem, getting other parties to develop the ecosystem further even without much of our involvement. This all brings us closer to the idea of decentralization and closer to the values that Bitcoin represents (and also from the business risk that reduces it substantially). So it’s absolutely one of our top priorities to launch the mainnet this year, and we’re working extremely hard on this.

What are the major milestones Crypto.com achieved so far, and what are your future plans?

That’s a bit of a general question, so I think getting to 3 million users is a huge milestone. In terms of the breadth of our product portfolio, we have one of the richest ecosystems in crypto today. We are lucky to be one of the key players to drive the adoption of crypto, so I think those are all great achievements. In terms of future plans, if you look at the next couple of months (which are the more immediate ones), we have got a few high-priority projects. Number one is getting regulated, so we have filed for a number of licenses, and we are filing for the ones that are still missing on our list. That’s number one. Number two is to launch the mainnet, again, super important from the point of our technology and product development. And the third one is to reach critical mass with our Exchange product. So now it’s spot. We’re going to roll out margin trading soon. Derivatives are in the pipeline, and we are onboarding tons of customers every single day. We will continue iterating on the value proposition for traders to join our Exchange. It’s a high-priority project for us to reach critical mass on this where liquidity begets more liquidity. And, again, if you extrapolate this route for another 5 years, our objective is very clear: go from 3 million users that we have right now to 100 million. And expanding the crypto nation to bring in users from the mass market into this industry.

Revenue and adoption are the top priority for all projects. Can you tell us how Crypto.com generates revenue from its technology platform and how you’re planning on getting the platform adopted?

We’ve always mentioned that we cover all three use cases: payments, trading, and finance. And in this case payments is our user acquisition portal. That’s where we’re very aggressive in terms of things like cashback and rewards on our cards and also on Crypto.com Pay. The majority of revenue today comes from trading, so when people trade on our Crypto.com Platform we earn revenue. And in the future a big chunk of our revenue is going to come from lending. So those are the key revenue drivers and we are on track to be profitable for the full year of 2020. That’s a big milestone, the company’s growing very fast, and we’re on track to hit this for the full year.

Where do you see CRO Coin one year from now, specifically its penetration as a payment option?

So again, we are going to be already on the mainnet. There is going to be robust activity on the mainnet in terms of processing payments for merchants. We are working on some projects that relate to accelerating merchant adoption that I think you will be very excited to hear about next year. There is also the aspect of DeFi and how we can accelerate DeFi developments on our roadmaps. So there will be some announcements on this as early as this month, and we are definitely doubling down our efforts in this field. We want to be at least the top DeFi wallet in this space and one of the major players. I think that’s all connected to CRO and Crypto.com Chai

What are some features or partnerships you’re working on aside from adding more Syndicate programs?

Again, DeFi is one of these. There are also new lending products that are coming later this year, so I’m very excited about this.

What will you do with 50% of all MCO that you have?

So we will, after this process of swap is close to the end, simply burn the 50% MCO we have in our multisig wallet by sending it to a burn address just as specified in the announcement yesterday.

Crypto.com Exchange

When can we expect the Crypto.com Exchange in the United States?

We’re working on it. Again, the regulatory environment is complex and there’s a number of issues that we need to resolve before we can enable this service for you as users. It’s a high-priority project for us.

For any exchange, attracting new traders and a user base is very challenging. It's a very challenging task. So what are your plans to attract new users?

I will mention two things. We will have a new fee structure coming out for the retail traders on our exchange this month. And we will also have a new referral program for the exchange specifically. So stay tuned for this because we think it's going to be a fantastic incentive for people trading on our platform.


I believe you know about the DeFi ecosystem. Is that already implemented or do you have another plan to implement DeFi?

So the first DeFi features are going to be rolled out this month. And we are building a very comprehensive roadmap to be a player in this space. I mentioned this during the last week's AMA. There are essentially three things that we're doing. One is talking totally different projects and making investments. Number two is integrating other top projects into our noncustodial wallet that was released two months ago, and the third thing is supporting more and more different projects in our platform. So you know, adding it to our app, adding it to the exchange and giving people access to these projects.

I think there's a lot of things that are required to be taken care of for DeFi — how do you make the UX good and easy to understand for people, but at the same time, don't sacrifice security for our users. I think those are the key challenges. And we're working on this.

The next section is about card updates.

Card Updates

Users have been asking whether there is any update on the Singapore, APAC card issuing?

We've selected a new issuing partner for our Singaporean program. And we're in the process of transferring the BINs from Wirecard to the new partner. So we hope to be able to start issuing the cards again soon. It's not going to be this month. It's a complex process.

Any update on the MCO Whitelabel Project?

An update on the MCO Whitelabel Program. I gave a brief note on this.

We've got a tremendous amount of interest. If you add all the companies that are interested in this product or program, it's probably more than 40 million users. So 10 times more than we have on the platform today. And in order to support these programs effectively, we need to secure our own principle memberships of the schemes. So we're working on this. We hope to be able to announce the first partners as soon as possible.

When Australia (and other communities) for card availability?

For the immediate feature, we are looking at Canada for Q4 and we are making progress in Australia. We are now building local teams in South Africa, Japan, Latin America. It is a global project and we are going to have full coverage. So if you’re in a jurisdiction where cards are not available yet, rest assured, we are most likely already working on it. However, as you know from our past experience it takes quite a while to roll these programs out. I do not expect any other programs to go live this year other than Canada.

When can APAC card holders top the card with stable coins?

Most likely after we switch to the new issuer.

Will APAC get an increased credit/debit card top-up limit for the card?

The credit/debit card top-up limit is actually caused by some of the regulation in Singapore so it's not a commercial decision by us. These are limits that we need to implement. If we get an exception from the regulator over there will definitely increase it.

What is the progress on Google and Apple Pay for APAC cards?
This is a work in progress and it will take a while before we can introduce this.

For the App, when will Australian users gain access to an AUD Wallet for purchases?

This is on the roadmap for this month. Stay tuned for AUD fiat on- and off-ramps.

When will ADA/Cardano deposits and withdrawals be coming back?
As you know, there has just been a hard fork on Cardano and we need to make sure that before we re-enable access that the infrastructure is stable and secure. Our team is working with the Cardano team in order to re-enable this as soon as possible. We understand this is very important.

How does it look like with earnings and soft staking in Switzerland?

I think it's going to be easier for us to begin offering these services soon.

Which areas does Crypto.com focus on at the moment?

Getting regulated, launching the mainnet, and critical mass for the Exchange, those are the three priorities for this year. There are obviously a lot of secondary importance projects that are in the pipeline and we will roll these out probably in Q1 or Q2 next year. But we will talk about this as we get closer to those dates.

How are the plans shaping up for marketing and building a strong core community, which is essential for any project in the crypto industry?

So a part of it is just going local. We've got local communities right now and we have begun to roll out local languages. In terms of French, there's more coming and by the end of the year we wish to have full coverage in all major languages. This is in line with our robust fiat onramps and offramps in every single market.

Again, we have local community management teams and local support 24/7. One way of doing this is just being closer to our community. And the other thing is that we simply need to do a better job in terms of building a product, making sure that it is useful, and then improving how we serve our customers on the platform. This is an essential element because everybody wants to be a part of something that they can be proud of the product they're involved with.

I can see you have stopped Nigerians from using debit cards to make purchases, is it a long term decision or it is being worked on?

This is a risking decision. There are always issues relating to risk and compliance. Our teams just collect all the data and make the decisions. We want to make sure that our platform is compliant and is not creating additional business risk for us. Sometimes these decisions happen.

Can you update us on the future roadmap for Crypto.com?

I think we’ve covered this.

Do you have any plans to attract non crypto investors to Crypto.com and how? What are the measures to increase awareness of Crypto.com in the non-crypto space?

So we think about this a lot. We have one project that we're working on, it's still early stage, but it addresses exactly that problem.

So you can think about what we are doing currently at Crypto.com is we are growing from the inside out. We are expanding the size of the Crypto community. Getting reach to the people who are you know, at the edge of it. Kind of interested in it but not really into it and we build products that are simple to use, easy to understand, and provide great value. That's how we get people in.

Now how do you get people completely from outside of the industry? People who only know Visa and a bank account? How do you get them in?

I think there's quite a bit to learn from some of the challenger banks, and some FinTech companies like Square, who have done a good job of being an honor to Bitcoin. How can we

learn from this and then accelerate this? We are thinking about this and thinking how we can solve it with another product. So you will hear more about this probably next year.

Why does the app crash when there is a big announcement? Can you ensure the scalability?

As you said, yesterday was an all-time high by a factor of five in terms of users on our platform. There were a few hours where the app was quite slow but its a process of constant integration. It took us slightly longer than usual to scale up because we hit the instances' limits on AWS. We are looking at this type of scale operation now that we're hitting AWS instance spin-up limits. So we will improve our systems continuously. We've learned a lot from yesterday and how it was handled. And I think that the ceiling isn’t much higher than right now.

When will Crypto.com be profitable? Is it still planned for the end of this year?

Yes, we are on track. We've grown tremendously fast this year.

As you remember, we had 1 million users in September last year. We are at 3 million users now and growing fast. The market is helping. Obviously everybody likes to see ETH at 400 and BTC at 11K. There’s great sentiment around cryptocurrency in general so it’s organic and it helps us drive demand for the products that we’ve built. We are on track to be profitable for the full year. It’s a big milestone and I think for the founding team and for the executive team this is a big achievement. When we started four years ago - compared to other companies in the other space - we were underfunded, so I think it’s a big achievement. We’re happy that we’re getting there.

Obviously there’s always a lot of space for improvement so we’re not stopping. Every week you will see new product updates. Every month there will be a new key milestone that we hit. Again we have a global team right now of over 500 people and these guys are working 24/7 to make sure that they’ve done a great job for you, so we’ll just continue at it.

That’s all I’ve got. 40 questions. Time check: 36 minutes.

To sum up: As you can see from my demeanor today, I’m not particularly pumped or I’m not particularly happy. I do read all your comments and some of you are super kind to us. BME shared reviews on the swap. I want to stress again that we listen to you. We do whatever is possible to make sure that the community is happy and united. Some of the things are possible, some are not. So again, one of the issues was the new staking tiers. We are immediately fixing this. The swap rate: we can’t fix it.

But we listen. And we will continue improving.

So I hope, that over time, this decision will become less controversial and that even some of you who have spoken negatively about it in the last 24 hours are going to come to the conclusion that, yeah, maybe it was the right thing to do, maybe one coin that is compliant and powers the core ecosystem is a better idea, especially compared to running into issues if we had decided not to do it.

I hope that you arrive at these conclusions and again, I hope that you will give us time to prove ourselves. Which we would love to do.

Again, I’m on Twitter. We are all on Telegram. If you guys have any further feedback-- I know I don’t have to encourage you - but feel free to share it and we will do whatever we can to make it work. Thanks a lot for tuning in today and I certainly hope that the next time we speak, we will all be in better moods.

Thanks a lot and take good care.