Kiwi cryptocurrency broker startup Cryptosaver has relocated from its Auckland birthplace to Sydney, with the founders claiming they have been unable to open a bank account for the business in New Zealand.
Founded a year ago by James Viggiano, Denym Bird and Jack Daffron, Cryptosaver is an investment platform for Bitcoin and other cryptocurrencies, designed to make it easy for users to purchase cryptocurrency and track gains on their investments.
Co-founder James Viggiano, who is now based in Sydney while his co-founders work out of Auckland, tells StartupSmart the startup was initially able to open an account with one of the New Zealand banks, but that bank soon closed their account.
“It was a huge setback,” Viggiano says.
“We knocked on the door of all the other banks, and none of them wanted to talk to us.”
According to Viggiano, cryptocurrency is a “grey area” in New Zealand, and so although the startup was an accredited financial services provider registered with the New Zealand Financial Markets Authority, because there is no set regulation, banks are being cautious.
“The product that we’re brokering isn’t [in] a regulated industry so the banks aren’t excited to get on board here,” Viggiano says.
Australia, however, offered a lifeline for the startup.
For starters, there are simply more banks to choose from, but more importantly, new Australian Transaction Reports and Analysis Centre (AUSTRAC) rules specifically regulating digital currency exchanges have given banks more confidence in catering to these new-era service providers.
Cryptocurrency is a “booming startup area right now”, Viggiano says, with new digital currency startups launching every couple of weeks.
And in Australia, there is something of a community that’s promoting the growth of the sector.
The Australian Digital Commerce Association is “doing a lot of work on behalf of all of us”, Viggiano says, while weekly catch-ups and industry events allow newcomers to learn from some of the more established companies that are “championing the way”.
In this way, the Australian ecosystem is “years ahead”, he says.
“There are other founders that have gone through the challenges that we’re facing,” Viggiano adds.
The maturity of the Australian crypto space also means there’s more competition here, but that’s not something Viggiano is too concerned about.
“It’s such a fast-growing industry. The pie is getting larger and we’re all just trying to get a slice of that,” he says.
It’s competitive but it’s not cutthroat, he adds.
“There’s so much more functionality, and more offerings that we can develop,” he says.
Viggiano’s equally unperturbed by the downturn in the crypto markets of late, with the prices of Bitcoin and Ethereum dropping almost 70% since the start of the year.
“It’s a disruptive new technology, it’s going to be adopted in waves,” he says.
Things got a bit “overhyped” last year, but “on the long-term horizon, everything is still looking great,” he adds.
Those people working on technology and tools in the industry are still doing so, he adds, and when the next wave comes “the infrastructure is in place to make it better and more mainstream”.
For other founders in the crypto space, the key is perseverance, Viggiano says. Cryptocurrencies are going to be around for a long time, he says, but “it’s early days yet”.
“Don’t be too rigid in what your product offering is going to be,” he says.
“The industry is growing so fast, you’ve got to be flexible … It’s hard to see what customers are really going to get value out of in the future.”
Cryptosaver is in something of an unusual situation, but while Viggiano is hopeful the startup will be able to operate in New Zealand again some time soon, it’s likely to stick around in Australia too.
And, for him, there’s a positive takeaway here.
“The key thing we’ve learnt from our situation [is] if you’re doing something that’s truly disruptive, the incumbent players are not going to be happy about it. It’s almost proof that you’re doing the right thing,” he says.
“Resistance is validation that you’re on the right track,” he adds.
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