31 Aug Using BitCoin for International Transfers with Des Landen of CrypBrokers – Episode 45
Chomping at the Bitcoin with Des Landen of CrypBrokers
Mona and Mark delve into the topic of cryptocurrency with Des Landen of CrypBrokers, exploring how BitCoin might be employed to tackle the challenge of transferring funds for EB-5. They discuss the benefits of working with a company like CrypBrokers, what the process of transferring cryptocurrency looks like, and the potential challenges around using Bitcoin to invest in an EB-5 project.
“We need to do two things to keep EB-5 alive: 1) Increase the visas, and 2) Find a solution to the difficulties in transferring currency.” Mona is not wrong about the two most serious challenges facing EB-5. Attorneys who deal with the program find it increasingly difficult to transfer funds out of countries like China and Vietnam, and perhaps Bitcoin is the solution. Today, Mona and Mark explore cryptocurrency as a possible answer to the transfer issue with Des Landen of CrypBrokers.
Des entered the trading world in 2009, when Bitcoin was getting its start. Today he works with blockchain technologies and liquid supplies of cryptocurrencies. On this episode of EB-5 Investment Voice, Des shares the basics of cryptocurrency and how CrypBrokers got its start. He also answers Mark and Mona’s questions about how the transfer process works and why CrypBrokers is a better choice than cryptocurrency exchanges. Listen in as Mona, Mark and Des deliberate whether Bitcoin is a feasible option for transferring EB-5 funds, and the potential roadblocks investors might encounter in using cryptocurrency.
The Fundamentals of Cryptocurrency
- Cryptocurrency is a digital asset in the form of an electronic payment, and Des contends that it is the future of money transfers around the world. Cryptocurrency employs a peer-to-peer network, eliminating the banking system as a third party in the transaction, and it operates through blockchain technology.
- The transfer of cryptocurrency is quick and cost-efficient. The regulations surrounding its use depend upon the local government, and while CrypBrokers deals predominately with Bitcoin, it is just one kind of many cryptocurrencies.
- Bitcoin’s value is not tied to that of any other currency. Instead, its worth is determined by the open market. Fluctuations in price are based on supply and demand.
How the Bitcoin Transfer Process Might Work for a Chinese Investor
- The client’s first step would be to set up a Bitcoin wallet using a PC or mobile phone. Then the client transfers money to a designated business account in China. CrypBrokers facilitates a price based on the exchange rate at the time for RMB to Bitcoin—as close to spot as possible.
- The negotiated amount is then transferred to the client’s wallet app, and they have the ability to instantly transmit the money via the blockchain ledger to another bitcoin address in the US, for example. The recipient sends the money to another exchange to cash out as USD funds.
- RMB rates are speculative. Just as if you were locking in a USD rate to send your RMB to the US, Bitcoin follows the same process. Cryptocurrency is highly volatile, thus you could be on the underside or the high side; it depends on market forces during that time.
- CrypBrokers lives by the KYC philosophy: Know Your Customer. They employ identification requirements similar to those banks would accept for international transfers. The client’s money is also safeguarded in that it is tracked on the public ledger.
CrypBrokers’ Origin Story and Client Base
- CrypBrokers began three years ago to fill a need in the American industry. The supply of Bitcoin comes from China and goes through separate routes around the world. To provide an avenue to support high net worth US clients, CrypBrokers had to establish a business there.
- CrypBrokers also serves people in undeveloped countries, as you can transfer Bitcoin anywhere around the world with an internet connection and a phone. The company has offices in Dubai, Hong Kong, Singapore, China, Australia, New Zealand, and the United States.
The Benefits of Using CrypBrokers Versus Bitcoin Exchanges
- As a Bitcoin broker, CrypBrokers has a relationship with the mining firms located in China. As such, the company gets wholesale rates, and they can supply large sums at as close to spot price as possible.
- There are no limits on how much a person could send. CrypBrokers maintains 70% of world’s supply of cryptocurrency, so they can accommodate transfers of $5,000 to $500M, and the company trades in all the major exchanges around the world.
The Challenges Around Using Cryptocurrency for EB-5
- Mona believes that while USCIS would likely accept Bitcoin, the challenge may come from banking institutions themselves. Clients who might want to put their money in escrow while their I-526 is processing may have to forgo that option if the bank doesn’t approve Bitcoin as a legitimate source.
- Mona recently spoke with leadership at Signature Bank, and while they do not currently accept cryptocurrency, their regulators are examining the possibility. (Banks must follow strict regulations to avoid serious consequences.)
- A potential EB-5 investor could cash out a transfer in the US and wire the money elsewhere, which theoretically would facilitate that money going into escrow at a bank. However, for EB-5, the source of funds has to come from the personal account of the investor. It won’t work to put money directly into a project.
- USCIS would deny cryptocurrency if there was any evidence of money laundering, but Bitcoin leaves a paper trail disclosing the detailed path the funds take. CrypBrokers ensures that the identification matches at every juncture.
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