Anton Katin On How To Organize A Licensed Crypto Business

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Alexander Belov   Contributor

Anton Katin On How To Organize A Licensed Crypto Business

You describe yourself as “an investor, entrepreneur, family man and crypto-enthusiast.” How did you decide to change from an investor to a crypto-entrepreneur? What is it about the crypto space that appeals to you most?

Anton Katin: I’ve been in the cryptocurrency industry for over 4 years now. It all started with an expensive trading training, the cost of which I “repaid” after 2.5 weeks, then I founded a cryptocurrency community, where I still share my experience, market recommendations. In the course of constant development of activity and activity, the team of professionals that worked in the community also grew and was able to build a whole ecosystem together with me.

What attracts me here is a young and interesting market with great opportunities. The industry is just beginning to gain momentum, and you are in the line of first responders who are moving and understanding this industry. It’s an unexplored jungle, with its own animal life, with its own flora and fauna, which you are the first to explore and tell others. Being a pioneer is always difficult, but it’s eerily interesting to leave a mark on history.

The market is an honest and living organism, you have to work very deeply with your psychology and with the psychology of the market so that you don’t get thrown ashore. It’s a lot of work on yourself and constant self-development, acquisition of new skills, in general, you will not get bored! That’s why I’m here.

You work with the legal side of the cryptocurrency industry, among other things. How do you assess the legal climate in different countries regarding cryptocurrencies? Who has advanced the furthest and who is going in the opposite direction?

AK: More and more countries are now starting to regulate cryptocurrencies, and generally not ignore but notice this industry, which is already moving forward by leaps and bounds.

As always, countries with a high standard of living are open to innovation and the development of new industry, attracting projects. Liechtenstein, Switzerland and the UAE are among them in the first place.

The only countries that go in the opposite direction are those that try by all means to prohibit what is imminent and what will allow society to develop. This is the wrong approach to innovative technology, just as it was with the Internet, those who denied it were dozens of years behind later.

By the way, when we started the project that deals with Bitcoin custody, we initially wondered in what countries we should get licenses to work for decades to come, where we could develop safely and what countries our clients would trust. The choice obviously fell on Switzerland, Liechtenstein and UAE, where we develop our activity, for example in UAE we already got a license for storage and two others for cryptocurrency operations.

Speaking of licenses, how problematic is it to get permits for a legal entity to work with crypto assets of clients? What licenses have you already received for cryptocurrency operations and what roads do these licenses open?

AK: I was born in Astrakhan, Russia, to a poor family, I didn’t have much money or cool connections when I first came to the cryptocurrency industry, but nevertheless I got my first crypto license in UAE for cryptocurrency transactions (buying and selling) ahead of others.

To say it was difficult is not to say anything, there was a lot of effort to get us noticed out of hundreds of other projects. Long months of work, hundreds of acquired contacts with whom there was a lot of interaction. It wasn’t the word, but the deed, our experience in the industry and our approach to developing this field that spoke for us the most. Since 2017, I’ve been developing crypto projects that are still running today, sharing trading recommendations with my community of 10,000 people that make people richer and more experienced.

Me and my team have a great background in trading, technical and fundamental analysis, banking and the blockchain technology industry. All of this allowed us to be the first.

The first license was to buy and sell cryptocurrencies, which I have already mentioned, this is handled by a company in the UAE TRES OTC DMCC, we do transactions from 100,000 euros with 1% commission according to all necessary state standards, absolutely legal and safe. In addition, the company shares half of the commission with people who have invited others for exchange.

The next license was for the development of utility tokens, which allowed us to officially develop and release tokens for projects such as SIMBA, TRES, FOSTER, O2PLUS. And any other crypto-projects that pass the appropriate vetting process can get a document from us to officially issue tokens.

And our third license is the storage of cryptocurrency in UAE by SIMBA Storage DMCC, which allows legal storage.

You work with SIMBA, a custodial cryptocurrency storage service with licenses to operate in several developed countries. How does the company address the issue of key security? Is there any chance of hackers gaining access to the vault? Or is this a problem only for “hot” vaults like crypto exchanges and DeFi protocols, whose assets may be on weakly secured contracts?

AK: My cousin’s field of work, who worked at the Center at MSU for many years, was closely related to microelectronics. After studying one of Trezor’s cryptocurrencies and taking it apart, he realized that this option was not acceptable for secure storage of large funds in the long term. After my request to assemble a secure wallet for storing Bitcoins, he provided twelve devices assembled from the most modern and technologically advanced hardware. He then used a secure computer to install the Bitcoin wallet and implemented encryption on each data storage device to maintain a high level of security.

Inside all of the devices are multiple hard drives from different manufacturers to ensure diversification. All of the devices were never connected to the network, a multi-key was created on each device, and the secret key used to restore access to the wallet never left the devices. The public keys were used to create a multi-signature storage algorithm.

A transaction from such a wallet requires the signature of multiple secret keys, ensuring an extremely secure process for storing digital assets.

Simba.Storage plans to place such key custodians around the world, namely in Switzerland, Liechtenstein, New Zealand and the UAE, making it virtually impossible for an unauthorized entity to gain access to all keys simultaneously.

Any unauthorized actions while using multi-signature will by all means lead to the cancellation of transaction and detection of intruders with further blocking of all their actions in the system. It is worth noting that multisignature also provides additional redundancy, in case a force majeure situation happens to one of the storages.

- Custodial storage services - doesn’t this contradict the ideas of decentralization, anonymity, “independence” of cryptocurrencies? Or is it an inevitable step towards institutional adoption?

The crypto industry market is very young, the idea of decentralization is beautiful, but utopian. We live in a society that was created by centuries of tradition, no innovative technology can change everything at once. But innovative technology can and does guide, “push harder on the gas”, turn the wheel of the “huge machine” a little in the direction of development and improvement of the established.

Decentralization seems to each of us a breath of air, creates the illusion of freedom, but it is not. Thousands of Bitcoins are lost forever, billions of investors’ money are lost due to their own inattention, fraudsters and hackers. People tend to put on rose-colored glasses when it comes to their freedom, but they don’t fully understand what freedom and decentralization, complete independence from the state are. When they talk about it, they long for it; when they encounter it, they are afraid and seek help and protection.

Initially, society and the state are not enemies, but two categories that should support each other, so maybe we will use blockchain technology for these purposes?

The adoption of cryptocurrency and the technology behind it by various states is not about shooting down the “original intent,” it’s about expanding the industry and making it global. More and more big serious companies in the cryptocurrency market are slowly coming to this realization, we realized this back in 2019, when everyone did not take our idea seriously. Sooner or later, only those projects that operate officially and legally will remain on the market. This is what will attract the flow of funds to the industry and acceptance by society.

How advanced is the OTC market in the cryptocurrency sector, and how does the company plan to develop this direction? Are there already major cases that can be cited as examples?

AK: The OTC market is developing very widely, but the number of companies that perform OTC exchange of cryptocurrencies officially is scarce, hence all the ensuing consequences: scammers, loss of funds, disappointment.

When it comes to large sums, investors look for security first of all, that’s why there are a large number of clients who are ready to make transactions on a regular basis.

We are developing the OTC market by making transactions officially and safely, attracting more and more investments to the crypto industry. To expand our audience, we share half of the commission with those who recommend us to others making a transaction.

This is a great niche for making money in the crypto industry, as big investors are highly interested in legal and reliable transactions when buying or selling cryptocurrency, and TRES OTC DMCC is the 1% of companies who do it legally and with low commissions.

A person can work from anywhere in the world, without leaving his home, attracting others and earn from one transaction at least 500 EUR (with a minimum transaction amount of 100,000 EUR).

By the way, I will be very glad to hear your opinion, as an expert in digital asset storage, on one very topical issue. How great is the threat of quantum computers, for example in picking a personal key from an address? Will the cryptography of digital assets succeed in preparing to defend against such powerful computing technologies?

AK: We have also discussed a similar question with my cousin, a specialist in the field.

For individual coins, maybe. The technology as a whole will simply switch to post-quantum cryptography (the Shor algorithm does not work for all mathematical problems used in cryptography)

Bitcoin, if I remember correctly, can decrypt old-style wallet keys.

Please name some basic rules to help a person minimize the chances of losing digital savings? Are there any new, particularly sophisticated, ways of fraud that one should be prepared for? Or have fraud attacks advanced slightly technologically?

AK: Recently I conducted a series of audio calls on Telegram with my community, in which I shared my experiences. One of the calls was just on the topic of security when working with cryptocurrency, I wrote them out on a separate sheet of paper, based on all my experience since 2017.

There are more than 20 basic points but here are the most important ones.

Be careful with your passwords. Keep passwords on flash drives, make 2-3 mirrors, keep them in different places, countries, storage facilities. Don’t take pictures of passwords, don’t write them on your phone or computer in notes, don’t send them to social networks and messengers. Always and everywhere use different passwords.

Check sites for phishing, check the name of the site in the address bar, every letter. Take your time to enter your data.

Don’t tell your wife/husband where your cryptocurrency accesses are.

At most passwords or data from 5-10% of all your Bitcoins.

Diversify your Bitcoins. At least 4 storage locations, preferably 20+. Decentralized platforms, banks, custodial vaults (SIMBA) and similar. Choose locations from different countries.

Create new emails for working with cryptocurrency and don’t write your data (name, surname, date of birth) in the email address.

Don’t follow links on mail, it could be cheaters. Only if you are sure that the letter came from the exchange/service after your actions: withdrawal, etc.

Buy most of your Bitcoins via exchangers with authorization from regulators. For example SIMBA, etc. 4-5% commission is better than 20 years in jail.

All these recommendations are for both regular and advanced users.  To minimize your losses, you can store your Bitcoins at SIMBA STORAGE and we will do most of the work for you. But don’t store everything in one place, find also alternatives (2-3-4 places) in different countries and with licenses.

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Alexander Belov   Contributor

Alexander Belov is a writer specialized in Blockchain and decentralized finance field. In 2020 he was included in the list of the top 30 most Influential People In Blockchain Industry by Hackernoon.