After such an act of realpolitik from the island we have seen incoming due diligence demands from various part of the world including Jersey. It wasn’t just our traditional fund client base that contacted us but also more conservative industry players, such as private banks that are approaching us due to increasing requests from their high net worth, risk aware clients. It’s the first time we’ve seen such traction.
Director Jean-Marie Mognetti, Global Advisors

Daniel Cawrey from CoinDesk gives a straightforward account of what happened at CoinCongress last week- 

CEO Alan Safahi delivered the Keynote talk to open the conference, playfully noting: “I guess I am the oldest guy in this space, so they asked me to talk about the state of bitcoin.” 

Alan also spoke of how companies have emerged in the Bitcoin space, and how they are actively lending further legitimacy to the currency (even without regulation from an overarching power.) Important companies noted were Coinbase, Kraken, BitGo, and Circle. 

BitLicense- Some Comments from CEO Alan Safahi of ZipZap, Inc.

As a community, we all knew that regulation would come down onto virtual currencies at some point. In fact, it is incredible that a BitLicense hasn’t been proposed before now.

The New York Department of Financial Services (hereinafter NYDFS) is the first institution to attempt to make a BitLicense framework that could both protect the general public and provide clarity for virtual currency entrepreneurs so that they can continue building their businesses without fear of being in violations of any laws.  

I have, in the past, alluded to how regulations would affect the Virtual Currency Community and why regulations are necessary (NY Bitcoin Conference, 2013.) Many people rejected this idea that regulations are necessary- yet here we are today, faced with a BitLicense proposal that could either stifle the market OR aid it in growing to its full potential.

 This first draft of the BitLicense is important. The weight and levity of this document cannot be stressed enough. Once this document, with its regulatory clauses and sub-clauses, is passed it will set precedent for all BitLicenses to come.

 As it stands, it is very much a well-rounded and well-thought through document. As many of you can see, it is also very biased (in favor of stringent regulation.) NYDFS has given the Virtual Currency Community an opportunity to have its voice heard, albeit in a totally unreasonable timeframe of 45 days. Many small entrepreneurs (majority of bitcoin startups) do not have resources at their disposal to properly analyze and respond to this proposed legislation in such a short period of time.

 Market and community leaders have voiced strong opinions on the majority of the document including the need to extend the time for comments by several months. To effect real change in the document itself, however, there cannot be a mass of incoherent complaints, suggestions and opinions. If the Virtual Currency Community could band around a few of the proposed changes surely we could affect some change in the framework.

Some of my observations on the BitLicense framework (what needs to be changed/paid more attention to):

-       Clarifying the definition of digital currencies (what’s included, what’s not).  This is not a simple task, but it must be done. 

-       Limiting licensing requirements to apply only to custodial relationships such as exchanges (those involved in buying and selling currencies) not other categories like multi sig wallets, software providers or anyone who receives or transmits crypto currencies

-       Applying licensing requirements only to exchanges based in NY or those doing buy/sell orders with people in NY

-       Creating several tiers of licensing for start ups (less than $1M in annual volume, no license needed), small enterprises ($1M-$10M/yr, one page application), medium enterprises ($10M -$100M/yr, long form application with small bond and fee requirements ), large enterprises ($100M-$1B/yr, audited financials, higher fees and bonds) and global enterprises ($1B+/yr, highest fees and bonds, annual audits).  Tiered licensing has proven to be a successful tool in allowing smaller businesses to abide by regulations while not crippling them. 

-       Changing “Permissible Investments” to allow investments in digital currencies for all using their own funds and to vary for custodial funds depending on licensing tiers proposed above (e.g. no regulation for startups and small enterprises, moderate “guidelines” and controls for larger enterprises for risk management and asset allocation purposes). 

-       Limiting KYC requirements to purchases made in excess of $1000 (similar to prepaid cards bought at grocery stores)

-       Changing Reserve requirements to mirror that of banks and credit unions.  The capital reserve requirements for a business in Virtual Currencies should not be any different than capital reserve requirements for existing banking and financial institutions. To force larger reserve requirements on virtual currency businesses would give an unfair advantage to the already-established banking and financial services businesses. By holding virtual currency businesses to the same standards as existing financial institutions it will increase the accountability of the new virtual currency institutions while not unnecessarily crippling them. *Capital Reserve Requirements: Reserve requirements are the amount of funds that a depository institution must hold in reserve against specified deposit liabilities.

-       Eliminating the redundant need for state level monitoring (if FinCEN rules were good enough for Financial Institutions, they are good enough for Bitcoin exchanges).

Many of these points have been repeated across the internet, and I hope that adding my voice to the masses will help influence this momentous development in the Virtual Currency realm. BitLicense is here, let’s get to work!

Have we got some news for you! ZipZap is now open in 34 countries around the world!

From Simon, SVP of BizDev at ZipZap: “ZipZap has a commitment to simplify and democratize payments worldwide,” said Mr. Simon Nahnybida, Senior Vice President of Business Development at ZipZap. “We are now enabling more consumers with the power to easily, safely and securely buy digital currencies at affordable prices using multiple payment options.”

Here’s a short piece by Newsbtc - Today’s Bitcoin News on the expansion through Europe:

Transaction network ZipZap has announced plans to expand into a whopping 34 countries in Europe thanks to strategic partnerships.

Buy With Cash Anywhere You Go: ZipZap Expands Global Cash Transaction Network To 20,000 UK Retail Locations Through Payzone Partnership

SAN FRANCISCO, June 24, 2014 /PRNewswire/ — ZipZap, Inc. (, the leading global transaction network, today announced its expansion to the UK through a partnership with Payzone (, one of UK’s leading consumer payments and cash distribution networks.

With this partnership, ZipZap now offers an easy way for UK residents to buy digital currencies at more than 20,000 retail payment center locations; UK users can also buy digital currencies like bitcoin, Lite coin and Dogecoin through one of ZipZap’s exchange partners such as ANX, Bittylicious and

"Many UK consumers prefer dealing with cash without having to disclose their banking information," said ZipZap’s Simon Nahnybida, SVP of Business Development. "Our partnership with Payzone allows customers to easily buy digital currencies online and pay at convenient locations within a walking distance from their home or work."

Payzone is one of the leading consumer payments and cash distribution networks in the UK, allowing consumers to manage prepaid phone plans, transportation ticketing and now their digital wallets.

"We are very excited to partner with ZipZap and participate in the digital currency economy," said Mark Mellor, Director of Sales and Marketing at Payzone. "We strive to provide the best products and services with the utmost convenience and ZipZap’s practices fall in line with our belief of providing quick and cost-effective payment services to consumers whilst offering an extra service for our merchants to add to their Payzone basket of services."

While electronic payments (via credit cards, debit cards, PayPal, etc.) overall will see double digit growth in the next few years, we expect to see an exponential growth with digital currency and cryptocurrency in the next two to three years,” said Gil Luria, analyst and managing director at Wedbush Securities. “We believe the UK, in particular, may be an early adopter of Bitcoin technology because of its substantial money remittance markets, which can be served by the lower price point of Bitcoin-based remittance services. “

In additional support of the UK expansion, ZipZap recently partnered with IDology one of the leading provider of innovative technology solutions for businesses, to support ID verification to help deter fraud and meet compliance standards.

About ZipZap:

ZipZap, Inc. is a global payment network, enabling consumers to buy, sell or use digital currencies with cash or other payment options. Founded in 2010, ZipZap is headquartered in San Francisco, California, with operations around the globe. For more information about ZipZap,

About Payzone:

Payzone is one of the leading consumer payments and cash distribution networks in Europe. Headquartered in Dublin, it has operations in 21 countries across Europe, processing over 630 million transactions per year on behalf of its clients. These transactions have a yearly value of over €13 billion Euro and are handled electronically through the Payzone network of over 240,000 points of service (terminals, vending units and EPOS tills) at more than 170,000 retail locations across Europe. Payzone offers a wide range of services including pre-paid mobile phone top-ups, energy pre-payments, bill payments, pre-paid Visa vouchers, local and housing authority payments, pre-paid Visa and MasterCard payment cards, payment vouchers for on-line shopping, gift card and loyalty programs, transport ticketing, lottery games, parking and electronic road tolling, debit and credit card acceptance, contactless payment solutions and world-wide money transfer services. Payzone also operates approximately 6,000 ATM cash dispensers in the UK and Germany. For more information, visit

Karen Sorenson


Bitcoin Spring

Spring is finally in the air!  Flowers are booming, birds are chirping and there is a distinct feeling of hope and anticipation all around.  This is especially true in BitcoinLand, where after a winter of eruptions at Mt. Gox, indictments and resignations at the Bitcoin Foundation, and a false outing of “Satoshi”, Bitcoiners are embracing the opportunities ushered in by massive VC investments (Circle, SecondMarket, Xapo), Bitlicensing in New York and sub $1,000 Bitcoin ATMs. 

CoinSummit, which hosted Bitcoin luminaries from around the world in San Francisco last week, could not have come at a better time.  Over two days we huddled, learned, strategized, collaborated and charted the course for the future of our young industry.

Bitcoin has proven more resilient than most imagined, but to date, despite widespread and sensationalized press coverage persists.  Bitcoin is still viewed as a niche currency hoarded by libertarian techies and savvy investors.  The question on most people’s minds this spring is how do we change that image?  How do we take Bitcoin mainstream?  

Andreas Antonopoulos wrote a great article last May on why Bitcoin is much more than mere digital cash.  However, since average consumers relate to Bitcoin first as a currency, mass adoption may only result when we address the non-tech consumer’s perspective first and foremost.  Here are a few areas we need to invest in to drive adoption. 

1.     Awareness: It took the Internet about 20+ years to reach 90%+ consumer awareness.  Gift cards reached that level in 15 years.  And Bitcoin will likely reach that level of consumer awareness in under ten years.  This awareness must include not only the benefits but also the risks of using bitcoin.  The media can be counted on to help with the latter “headline” risks, but we need the Bitcoin Foundation, entrepreneurs and investors to lead education on the benefits of Bitcoin.

2.     Accessibility: Any digital currency needs to have easy on-and off-ramps to fiat currencies (alt-coins sidestep this issue by relying on Bitcoin).  Massive investment in technology and infrastructure is needed to make the process easier for consumers.  Unfortunately, many early Bitcoiners who stand to benefit the most from the rise in valuation that massive adoption would bring have chosen to hoard bitcoins instead of investing in supporting its infrastructure.   

3.     Privacy: There is a great debate among Bitcoiners about privacy vs. anonymity and to what extent regulations are appropriate for a decentralized technology. Talk to average consumers, though, and they tell you its a question of trust.  They simply won’t share their personal info online unless they know the merchant or third party and trust them.  Similarly, Bitcoin will not reach mass adoption if consumers don’t trust its leading companies. From easy, intuitive online tools to systems that tolerate user error or negligence to consumer protection mechanisms, we have our work cut out to establish an intimate level of trust with our customers.  Pushing for anonymity under the guise of consumer protection may actually have the opposite effect and lead consumers to distrust Bitcoin.

4.      Stability: Volatility has been cited as a major deterrent for mass adoption.  Economist and Bitcoin evangelist, Tuur Demeester recently noted that “The best way to handle Bitcoin volatility is to market Bitcoin in places where volatility has become the norm”.  For people living in Argentina, Venezuela, Cypress and Egypt, Bitcoin is a lot less volatile than their own fiat currency.  Thus, Bitcoin needs a go to market strategy that prioritizes the best use cases such as remittance and micro transactions, were the pain points are large enough to overcome any concerns about volatility.

5.     Utility: The number one question consumers ask when learning about Bitcoin is where can I use it?  Companies like BitPay and Coinbase have done a great job of furthering the cause of mass adoption by going after recognizable names in online retail for Bitcoin acceptance. However, it is not until we get the Starbucks, WalMarts and Home Depots of the world to accept Bitcoins (online and offline) that we can say we have truly arrived as a technology community.

There are many specific tasks that need to be completed to accomplish the above objectives including those related to technology (e.g. creating user friendly solutions), security (preventing fraud/theft/crime), smart regulation (establishing consumer protection laws), investments (in infrastructure), marketing (user friendly terminology, branding strategy) and promotion (consumer incentives). 

The good news, however, is that some of the brightest minds on the planet are flocking to Bitcoin to work on these issues.

As we move past our winter of discontent and enter the next phase of Bitcoin’s existence, at least we know Bitcoin is in good hands with an army of enthusiastic supporters who will work day and night to improve the platform, infrastructure and ecosystem.

It’s time for the Bitcoin Spring.

                                                    # # #

Alan Safahi is CEO of ZipZap, Inc, an entrepreneur and a digital currency evangelist who lives and works in San Francisco Bay area.  

Alan can be found on Twitter @alansafahi