Currency.com

2022: Termination of services to 0.5 million Russians and DDoS attack

In April 2022, the Currency cryptocurrency exchange was subjected to a large-scale DDoS attack after it announced the cessation of service to Russians. The owner of the company, Belarusian Viktor Prokopenya, said that Russian hackers were behind the incident. The exchange has 500,000 Russian customers.

2021: Said Gutseriev sold shares in Currency.com and two more crypto exchanges and earned $150 million

On August 18, 2021, it became known about the withdrawal Said Gutserieva from the capital of three cryptocurrency exchanges: Currency.com, Capital.com and Zubr.io. They write about this "" Sheets with reference to the statements of the companies and the representative of the businessman himself, who is a member of the board of directors "" and Safmar financial investments"." M.Video More. here

2019: Said Gutseriev and Victor Prokopenya launch a crypto exchange Currency.com

The crypto exchange was Currency.com created and launched on January 15, 2019 by Belarusian entrepreneur Viktor Prokopenya and the son of Russian billionaire Mikhail Gutseriev Said Gutseriev. Their investment companies VP Capital and Larnabel Ventures invested about $10 million in a project they indiscriminately called "the world's first regulated full-featured platform for tokenized exchange assets." The exchange, its founders say, will be interesting primarily to those who are already holders of cryptocurrencies, since it provides an opportunity to invest them, and not just sell for fiat money.

The launch of the Prokopeni-Gutseriev crypto exchange was another reason for the Western and Russian media to write about the IT championship of Belarus. The exchange, like the entire Digital Belarus project, seems impeccable in terms of PR and marketing. But questions remain about business mechanisms for Currency.com.

According to the manager of VP Capital Nikolai Markovnik, the function of the holder of a financial instrument acting as a token security, in the project is assigned to the company Capital.com, which has a British license FCA (broker, investment company). The same company guarantees the customer that the price of the token meets the security price, whether it be shares, precious metals or raw materials.

The necessary amount of security is purchased for each specific application of the platform user, explains Mr. Prokopenya. The corresponding funds in the Capital.com "are formed in accordance with the legislation of the European Union." If financial instruments that are purchased to secure obligations under tokens involve any payments (coupon income, dividends, etc.), the income received by the operator as the owner of the asset is transferred to the holder of the token.

At first glance, the economic essence of the instruments proposed for placement on the new exchange (tokens for real assets) is close to traditional ETFs - traded exchange-traded investment funds, which Mr. Markovnik confirmed. However, direct comparisons are not quite correct, since in this case the client will have to take into account a number of risks that are not characteristic of traditional ETFs, said Oleg Yankelev, senior partner of FinEx Capital Management.

As part of a number of blockchain projects, their creators have already tried to tokenize real assets - the dollar, gold, shares. None of the attempts succeeded. Effective and reliable mechanisms for providing tokens with basic assets have not been created, "says Mr. Yankelev.

- There is no guarantee that each token will indeed be secured by a declared asset. At the center of the ETF infrastructure are both the custodian and the administrator, the largest of which - Bank of New York Mellon, HSBC, State Street and Northern Trust - hold assets worth tens of trillions of dollars. "They are responsible to investors for ensuring that each issued security is truly secured by the declared assets. This business is built on trust. If any of the giants at least once make a mistake and even more so commit fraud, their business will be doomed. The guarantee of the purity of the transaction for the investor is the reputation, experience and independence of the custodian, "states Oleg[1].

According to him, in the case of the new Belarusian structure, there is no such guarantee: the administrator is a new company (the license Capital.com entered into force on October 26, 2018), not known on the market, which does not have the necessary infrastructure and independence from the trading platform.

Investors of the Belarusian platform will have to take into account the specific risks associated with the irretrievable loss of digital assets (loss of a private key), with technological problems (failures and breakdowns leading to disruption of transactions), cyber risks (hacking and compromising wallets or exchange infrastructure), adds Alexey Prokofiev, partner of the Add.Capital fund.

The issuer of the token is the Currency.com platform, to which the end user of the financial service has the right to demand the redemption of the token at any time.

Artem Tolkachev, head of the Sputnik DLT blockchain integrator, resembles a scheme for the functioning of the forex market: the client does not trade real dollars and francs, but gives orders to the forex dealer, to whom the client has claims rights.

"Ideally, each user should be able to take tokens from the operator, manage them at their discretion without an intermediary. However, this is not achieved by legislation that does not recognize the token as a security. So far, it is only an identifier of a security, its digital embodiment, "he says.

Victor Prokopenya parries: on execution of the client application of Currency.com less than a second as the Capital.com and Currency.com servers are in one data center (LD4 Equinix) in which also servers of many other exchanges are located will be required.

In an ideal situation, tokens can indeed be more liquid than traditional securities, confirms Mister Tolkachyov.

"OTC transactions with securities are usually calculated according to the T + 1 or T + 2 scheme, that is, the delivery takes place one to two days after the completion of the transaction. In the case of tokenized assets, everything should be much faster due to automation, smart contract logic, etc. Speed attracts investors, their circle is expanding, "he says.

Whether the Currency.com with the inherent specifics of the organization will be in demand is too early to judge, experts interviewed by Kommersant say. Mister Tolkachyov notes that the very appearance of the legal possibility of converting cryptocurrency into fiat with the presence of a bank account and an understandable tax regime is a "good sign for the industry."

Be that as it may, for Mikhail Gutseriev, who invested a lot in Belarus (he modernized the Mozyr refinery, is building the Nezhinsky GOK), this country has also become a field for games with blockchain and cryptocurrencies.

Gutseriev had carte blanche for an experiment with Currency.com on behalf of the first person of the state. That is, practically nothing risked from a regulatory point of view. As for financial risks, for a businessman his level of $10 million is not a very significant amount, "the source of Kommersant, close to one of the residents of PVT, believes.

According to him, Viktor Prokopenya was "appointed" the realizer of the project as "Gutseriev's man" and "copes well with his role."

According to one of the investors who considered residency in PVT, new opportunities have opened up in Belarus for diversifying the business of the Gutseriev family.

"They are actively testing a cryptocurrency niche, in which they probably will not have competitors in the republic. In an interview, Mikhail Gutseriev mentioned that he hoped to open three or five high-tech companies in Belarus. I think this case will not be limited. The Gutserievs are specialists in the construction of business empires, "the source said.

See also

• Information technology in Belarus

Notes