Simon Grunfeld is the Executive Director and Founder of Ibinex, a white label exchange provider, mobile wallet provider, and ICO blockchain developer. We sat down with him at the terrace behind Old Billingsgate, on the sidelines of the Finance Magnates London Summit 2017.
CV: Tell us a little bit about yourself and the services that you provide.
SG: So, I originally came from the retail FX side, where I’ve had the fortunate experience of not only developing a platform for retail traders but also developing and being a partner to not one but two forex brokers—Gallant FX and Gallant Capital Markets. And before that, we launched a platform called Gallant VPS, a B2B platform that was sold to other brokerages as well. I left that industry back in 2012 and started seeing a new industry take shape in the form of cryptos.
SG: So in 2014 I incorporated Ibinex, which is currently set up as a St. Vincent and Grenadines company as well as a UK entity. What we (and I) do on the “day-to-day”, is cater to customers and institutions that are looking to set up their own crypto exchange for the purpose of either providing their own client base with a platform to buy and sell currencies or if it’s for the purpose of launching their own custom token in the form of an ICO. We provide a lot of different mechanisms and tools to do so.
CV: Alright, so you basically guide [ICOs] through the process, and everything else, right?
SG: Correct. So, we have a 30-day project plan. Even before we get to the actual project, there’s a little bit of a vetting process we do with our client. I try to understand their background, what their capabilities are, who’s on the team, what the opportunity is, their strategy, their marketing mix, how they’re going to do things…A lot of the clients already have all of that in place. But most of them don’t have a banking solution implemented, and if they’re going to be opening up accounts for retail, they’re going to need to be able to accept funding. That’s a big problem that we’ve actually solved for many of those customers.
SG: Once we get all that squared away, we actually begin our project with them. We do a kick-off, just like any other project plan. It starts with us doing an implementation of our platform on a configuration that we help them set up in the data center of their choosing. We have a preferred partnership with IBM that we like to work with because we already have a template set up there, so it’s actually very turnkey to get them set up.
SG: Once they’re up and running—or even before they go live—there might be some customization that goes into [the project]. It’s usually some basic stuff—logos, color schemes, verbiage… We do training with them to show them how the back office works, and then we basically hold them by the hand in each step of the way with the purpose of them going live. Then we support them not only past the goal-line but we also provide them with the necessary liquidity to operate their exchange.
SG: So, the first part—the actual project of implementing the software—just begins the entire relationship. After they’re set up, the liquidity is really the long-term play. Ultimately, Ibinex’s goal is to effectively become a prime broker in the crypto space.
CV: So, what would be the difference between you guys and, say, a company that simply offers liquidity?
SG: We provide both the “parrot” and the “cage”. We allow our people not just to run an exchange but we provide the liquidity to run it as well. They don’t have to source it; they don’t have to go out, run around and try to find relationships and find inventory. We do that as well.
SG: But one of the other competitive advantages we currently have in the works is how we actually provide utility to our white labels that nobody else can provide. And we actually have a plan currently in the works which we call the Ibinex Ecosystem, which is going to provide much needed value to our clients, to our exchanges, that they wouldn’t be able to achieve on their own.
CV: Can you tell us a little bit more about that transportation coin? (In reference to a previous conversation we had off the record)
SG: (laughs) Without going into too much detail, I noticed that there’s a problem when it comes to private transportation. Not just private, but also public. To better get my point across, let’s talk about a regular scenario of a very busy intersection. Imagine how many times you’ve been at this intersection and had traffic either clog up behind you or in front of you because—for whatever reason—nobody’s really giving you the time of day.
SG: Before I continue onto that, this idea is actually going to find more value when we switch to autonomous driving, because I noticed that there was a problem with this in particular.
CV: (Interrupting) So you would say that you have a lot of faith in self-driving vehicles?
SG: Absolutely! I have more faith in self-driving than I have with actual drivers. Correct. Human error is what causes all the accidents on the road. It’s not automation. It’s people who are either inebriated, not following the rules, or distracted.
CV: Like people who don’t know how to drive in roundabouts?
SG: Yes, exactly.
SG: But this is something that came up and I noticed that there’s a problem. Google started experimenting with self-driving cars years ago and it worked really well. It worked really well up until a point. Now, at what point did it start to fail? It failed when you had two cars driven by robots come to the same intersection at the exact same time. And they stopped. They paused. They couldn’t continue.
SG: There was no human sitting in those seats saying “Oh, you know what? You go.” And then another human acknowledging: “Oh, OK, I’ll go”. There was no negotiation between the operators of the vehicles.
SG: I’ve identified a need to create a tokenized platform for public and private transportation, which if done effectively, would provide a solution to the ever-growing transportation markets, specifically around traffic mitigation and reducing overall congestion and making it safer for day-to-day people to use.
CV: Alright, so when someone’s not in a hurry, they get “rewarded” for that?
CV: What do you think it would take to make a crypto less volatile?
SG: To make it less volatile you’d need much more inventory, and you need to have much more open interest.
CV: You’re talking about a higher trading volume?
SG: Yes, so why do you see the kind of 5 to 10 percent swings on cryptos versus, you know, 20 basis points to 50 basis points in a foreign exchange? Well, on a foreign exchange you’re talking about a 5 trillion dollar daily turnover. Cryptos are nowhere near that at this point. So, in order to see the smooth trends, relatively speaking, from a daily perspective or weekend perspective, you just need to have a lot more volume.
CV: Let’s talk about ICOs right now. How can we deal with issues like distrust that surrounds ICOs? You know that there are a lot of governments that don’t trust them. The public also has trouble trusting ICOs.
SG: So, I actually head a committee called the ICO Certification Committee, which is a subcommittee to the Financial Commission, a software-regulated commission based out of Hong Kong. We actually certify ICOs, and our process begins with first analyzing the whitepaper.
SG: It then moves onto auditing the people behind it—the team behind it, auditing the smart contract to make sure it adheres to its logic, understanding their marketing goals, understanding how they’re going to go ahead with their fiduciary commitments. There’s a whole laundry list of things we go through and check off in order to make sure that these guys are legit. Then we put our stamp of approval on it. In the U.S., we have the FDA—the Food and Drug Administration. They stamp and they approve products for consumption.
CV: And Europe has the Conformité Européenne.
SG: You said it better than I could. So, yes, in that regard, that’s exactly what it is.
SG: You will start seeing the Deloittes of the world starting to certify them for the sole purpose of making sure that they do what they say.
CV: That’s a wonderful idea.
SG: (jokingly) Yeah, exactly. It’s a good thing you came up with it!
CV: Well, that’s all I’ve had to ask, but if there’s anything else you’d like to comment about, things that you’re going to do in the future, please feel free.
SG: So, the Ibinex Ecosystem is the biggest thing that we’re about to start really getting into. We’re looking right now for a few partners to help us out on the resource side and the capital side, because this is a very long, very robust project that we’re about to engage in.
SG: As I mentioned previously, it will create an underlying network—an intrinsic network—for our white labels. Everybody that wants to get connected into the Ibinex Ecosystem will essentially be allowed to “fish in each other’s ponds”, so to speak. This is beneficial for them to present other opportunities that aren’t necessarily theirs but are nonetheless valuable to their clients. It’s a very interesting concept; hasn’t been done yet.
SG: In theory, it works, but so does bending space-time and that hasn’t been put into practice just yet. However, we’ve seen similar models working in different markets that we are going to enhance, to really tighten down to make sure that it does provide that kind of underlying value. That’s really where the Ecosystem comes to play.