November 13, 2018
At the recent Malta Blockchain Summit I had the pleasure of meeting Totte Löfström (@TotteLofstrom). Totte is the CEO of the new Swedish cryptocurrency exchange Trijo. We agreed that I would interview him about his experiences. Thank you Totte!
– Please tell us about your organisation, it’s founding and goals.
Trijo is basically a three-legged organization. Our foundation is the Swedish cryptocurrency exchange called trijo.co that will be released at the beginning of 2019. Aside from the exchange, we’re also running a crypto news site called Trijo News and a news agency service (Trijo News Agency). The business of the latter is basically to offer ready-to-publish news feeds for other crypto companies to add on their site to give their visitors a reason to visit the site every day.
The goal with all parts of Trijo is to make things simpler. It is still too complicated to buy and sell cryptocurrencies, and Trijo Exchange aims to lower the bars drastically. If it takes more than three minutes to register and get going, it takes to long.
– Why did you choose Estonia and were you considering any other jurisdictions?
To understand why we choose Estonia, one must first understand why we want to be regulated in the first place. In short, it is our belief that unregulated crypto companies are facing difficulties in the next few years. When governments and states start to understand what cryptocurrencies are, they will also try to regulate the industry as much as possible in order to protect their citizens from scams and unserious companies. We think this is a good thing – at the end of the day regulations will help the crypto industry to find its place in the global economy.
Anyway, to actually answer the question: since the regulations that are in place here in Sweden are built for the old financial system, we simply had to turn to Estonia in order to be properly regulated.
– How easy or difficult was the licensing process? Did anything stand out to you about it?
It was quite easy with the help from good Estonian lawyers, but it took some time. Things like apostilled documents and that we had to provide criminal records for the company (which does not even exist in Sweden) made things a bit complicated at times.
– How do you think the EU should regulate cryptocurrencies and exchanges?
In my opinion, cryptocurrencies should be treated just like traditional financial instruments, but at the same time, the legislation needs to be properly adapted the special conditions and situations that cryptocurrencies could bring. The big obstacle for crypto and blockchain to be able to grow and evolve isn’t regulation itself, but the risk that the legislation does not really understand what it tries to regulate. For example, the EU has to decide if bitcoin is a currency or not, because this in-between stand that let states decide for themselves tend to lead to contradictory legislation in the end.
A good example is that the Swedish tax authorities have classified bitcoin as “other asset”, while the financial authorities have classified it as not exactly a currency but still something that requires you to register as a payment provider, but only if you are also are handling fiat currency.
The industry needs some clarity in order to grow and attract serious investors.
– What is your opinion on the Maltese crypto license?
I do only have experience with the highest tier license for exchanges since this was the one that Trijo Exchange planned to apply for, but in my opinion, Malta missed the mark quite a lot when the rulebook was released. I have published a column about this, but in short, the license tends to exclude all startups with a capital requirement of a whopping 750 000 euro. At the same time, the listing requirements seem to be way harder than reasonable, which could exclude many of the media to large cryptocurrency exchanges that would otherwise be interested in applying for the license.
However, after having talked to people in Malta I have understood that the latter should not really be a problem for the exchange giants – it all comes down to knowing the right people. Which on the other hand could be a problem in itself.financialguy