KYC/AML? CRYPTO A RISK? READ MORE HERE…
Yes and no. The honest answer is there is always risk. Though initially, we are a membership plan, with all the risks involved in any membership plan. Your local gym could go broke, and by the time all the preferential investors or suppliers have taken whatever is left, chances are you won’t get a refund for the remaining time of your membership. However, similarly to your local gym, we wish to grow our business. We want to succeed and grow. So, we are going to do our utmost best to grow and be successful. Moreover, it is not only about making a profit as a company to satisfy a growing number of investors. The easiest thing for us would have been to take Venture Capital (VC) money to get started. Yet, we took the road of organic growth, to ensure our soul didn’t get crushed under immediate pressure of VC demands. We don’t mind capital to come in, and are happy to talk with VCs. However, we simply are more than just a company, we are a building a network of legal entities to enable our pilots to thrive. We are on a clear mission to help regenerate Earth.
This requires a careful balancing act. Blockchains, NFTs and cryptos are a relatively new tech/industry. This also has implications on the legal front. Government bodies need time to adapt to new technologies, such as web3 or AI. This is normal. It has happened with all new technological advancements during all of human history. VCs, as well as government bodies function the way they do, and hapily so. As a start-up, we are grateful they are on our side. This is a story of cooperation and of compliance. We mutually adapt as time progresses, laws change and market conditions for capital too. We will comply to all regulations. Now, UK law leaves a little bit of space for starting companies. Hence we start with initial sales. This brings in some revenue. Yet, we do know, we may have to design certain specific NFTs to access certain functionalities, which then will require KYC. In terms of Know-Your-Customer (KYC) and Anti-Money Laundering (AML), we are looking to integrate onfido.com’s secure software to perform required checks. Yet, we also know secondary marketplaces such as OpenSea don’t require KYC… So, we have to perform the right balancing act in terms of being compliant. Logical. And we wish to do so.
We’’ll be very diligent with age as an important threshold. Minors have to be protected. At best parents might create a custodial wallet, and in that sense educate their children. Our business is gaming and gamified learning. We will use blockchain & AI-tech to develop empowering learning tools for all ages, yet on the monetary side of things we can only accept wallet owners 18+ of age. This is highly important in terms of our engagement with schools. The school can own a Magictribe.one or Treespaces membership NFT. So when we make digital assets of a drawing by children, we need the parents permission, and the school and/or parents must be owner of the wallet where the NFT is stored. It can be owned by multiple parties. There’s many options, and it is an interesting learning process. We strictly must adhere by the law, in order to make it fun and beneficial for all parties involved. It is logical that we cannot and may not put financial tools in the hands of minors, especially without parental guidance. Yet, there are ways of interconnecting what minors can do in playful and gaming terms, with what adults, or for instance schools can do as a legal organisation.
Another legal requirement, is putting the right disclaimers in place, and to warn for the risks of crypto. Hence, our disclaimer on our landing page, as well as in relevant documentation. We are selling NFTs, and as long the volume is low, we may need not even have to mention that crypto is risk. We are not a crypto exchange. We are not a bank. We are not a fintech. Magictribe Media Ltd. is a media and gaming company. We are not even selling the NFTs on our own site, for now. We are using a third-party provider manifold.xyz which has established itself as a solid gateway for minting NFTs and more blockchain-related services. We know we will have to ask you to pass a KYC/AML-check. And we do think this is a very good way to go, comply like all other companies have to. We’ll set up an AML-manual, even if we were not required to do so at this stage. NFTs are a bit of a grey zone. If they function as pure utility, and aren’t considered an investment, then still there can be a caveat when a buyer uses crypto to buy the NFT. For this reason alone, a check should be in place to see if the source of that digital money is legitimate.
Maybe over time regulators will create new legal asset classes, and open the door for different types of procedures. Yet, this will take time. So, we all have to be clear and straight-forward, and try to mitigate risk as much as possible. When you buy our membership, you should realise there is a risk our team fails, similar to your local gym going bust. Toward next stages of our ecosystem’s evolution, we know you will be able to gather tokens and convert these to our own cryptocurrency, once it is listed on public exchanges. We say so much in our introductory videos. We are going to give you bonus tokens on a monthly basis, in exchange for fullfilling tasks and quests. We are not there yet, but it will come. So, we will need to put KYC/AML in place to make some of our functionalities happen, over time. This implies (at least for certain functionalities) you will have to share your ID-data, as well as will have to smile to your devices camera, whilst doing the check via onfido.com. And we believe that is healthy. It provides you with an extra guarantee/safety as a particpant member to our gamified ecosystem.
We strongly advise you to use a crypto wallet from a provider who also does KYC/AML, when buying one of our initial membership NFTs. The wallet Coinbase offers is a decent one. The Coinbase wallet connects seamlessly to Manifold. Moreover, even if you were to buy through a wallet that doesn’t require KYC/AML yet, we will ask you to do so once we install access to real estate opportunities, logical: since then we need to create an area where we do check if an individual is legally eligible to partake in real estate. If you want to partake in the next steps of our ecosystem, we will require you to reveal who you are, as we will be obliged by law. So, there are 4 things you should consider. One, being that we can’t guarantee your pseudo-anonymity. Two, being that you have to consider the risk involved with a blockchain-related platform: we can’t guarantee any future valuation. Nobody can. Three, the fact being that you will be in an environment with highest security and safety standards. Four, being the simple fact: we want to succeed in our mission, and will make it as solid, fair & fun as humanly possible.
INFO & LINKS ON COMPLIANCE
As mentioned we will use ONFIDO to do our KYC/AML check. Here are some screenshots from their site:
What caught our eye, is that they work with Revolut banking app, which is one of the best globally (UX/UI.)
When thinking of creating a good onboarding flow, as well such things as an AML manual, we have been observing legal requirements…
All of the above are related to UK-law, and thus all links are from the UK-government. It comes down to the fact that we have some room to sell our initial NFTs here, selling 149 is okay. Their pricing is well bellow 10000 euro, though accumulated the 149 NFTs will surpass this. So, we are very careful in the steps we take. We know it is wise to integrate a KYC/AML-procedure, even if we don’t have to immediately register with the UK’s FCA, Financial Conduct Authority. Chances may be, over time, we may have to do so anyhow. This depends on how we will be perceived. Gaming is not banking. Yet, payments in crypto must be monitored, as mentioned above. Moreover, some aspects of what our membership will be capable of doing in the future, have aspects which could be perceived as akin to the more financial. Play2Earn indicates this, which is playing, yet also has aspects of earning. I will depend on what elements of our ecosystem are where. Real estate aspects will reside under Ecosphere Ventures Ltd. (which will come into being during October 2024. So, it depends how we’ll construct it, as well as what resides where in a legal sense. Better to anticipate, than to be unprepared and late.
Both the USA as the EU are making similar progression in terms of the law. This is especially important as we will need a subsidiary on European mainland by end of 2024, to be able to keep legally operating in the EU. We are taking the necessary steps to make this happen.
More info on MICA (EU legislation) can be found here:
And in the USA things are moving gradually as well, and it is to be expected that also there KYC/AML, as well as disclaimers and so forth will be introduced widely. It is a very healthy sign exchanges like Kraken & Coinbase luckily are already implementing this: