How Nebeus is growing its crypto-backed lending business and navigating the regulatory landscape in Europe - Interview with Michael Stroev, COO & Head of Product at Nebeus. (2024)

The Cryptocurrency landscape has been ever-changing, evolving, and since the start of the most recent boom in 2020, which brought the price of Bitcoin to over $50K, it has attracted the eyes of millions of people, businesses, and governments around the world. The effect of all this attention has shifted the industry as a whole and, in many senses, has pushed it to even greater heights. Cryptocurrency prices have risen even higher, decentralized finance (DeFi) has seen a massive boom, new industries and technologies, such as the NFTs, have formed, started becoming mainstream, and the crypto-backed lending market has grown by over 1100%.

But as new technologies and industries rise, their regulatory aspect starts being questioned. Especially if the technology is highly complex and has been used for money laundering purposes. Even more so if it is challenging existing financial systems and government monetary controls, which is precisely the original intention of Bitcoin. Governments worldwide have been aware of crypto and have been trying to establish regulations all the way since the first crypto boom of 2017. Some took a positive and adoptive approach, other outright banned cryptocurrencies, while many were still in discovery and ideation mode. But 2020 set up a new playing field and showed that a regulatory landscape needed to be set up much faster than anticipated.

Some of the most notable regulatory shifts of the past year included:

• In 2020, the UK asked all cryptocurrency businesses operating in the UK to register with the FCA for the AMLD5 cryptocurrency registration.
• In June 2021, China told its banks to stop facilitating crypto transactions and issued a state-wide ban on crypto mining.
• In July 2021, Spain asked all of its local cryptocurrency businesses to register with the Bank of Spain for the EU MiCA (Markets in Crypto-Assets framework) registration.
• In November 2021, the US president, Joe Biden, signed an infrastructure bill containing crypto broker reporting requirements, signifying an end of hiding gains for many crypto investors.

Nebeus, a European crypto-backed lending company, has been running its business since earlier than the first crypto boom, with thousands of users across Europe. Nebeus has an app and a desktop platform that consumers can use to get loans by using their cryptocurrencies as collateral. With many people investing in crypto for the long term, the ability to leverage investments to access liquidity has seen a massive jump in demand.

“Our users have been getting loans to pay for their daily expenses, for more specific and targeted expenses, and many have been using Nebeus to get loans to diversify their investment portfolios. Many users have been using their Bitcoins to get loans to purchase Ethereum, for example, thus benefiting from the price growth of both assets.” – says Michael Stroev, COO & Head of Product at Nebeus.

Additionally, Nebeus offers its users a whole ecosystem of accompanying cryptocurrency services that allow them to use Nebeus just like an online bank, but the main focus of Nebeus is crypto-backed lending.

Being a centralized finance (CeFi) cryptocurrency business, regulation has been at the forefront of Nebeus’s business strategies. COO & Head of Product, Michael Stroev, shares more details with us in this exclusive interview with TechBullion.

Tell us briefly about yourself and the services you provide at Nebeus?

My name is Michael Stroev, and I’m the COO and Head of product at Nebeus.

I lead all of Nebeus’s product development, from concept ideation all the way to user acquisition, for all products and services on all of Nebeus’s platforms: iOS, Android, and desktop. I also oversee Nebeus’s operational and growth strategies.

Before joining Nebeus, I founded multiple startups and had a diverse career in building products in more than eight different industries across Europe and the US.

We have heard about crypto lending, but some of us may not really understand it. How does crypto-backed lending work, and what are the benefits?

Crypto-backed lending is when someone who owns bitcoin, or any other cryptocurrency, uses that cryptocurrency as collateral to get a loan. The main benefit of this is that crypto investors can use their coins to get liquidity without needing to sell their investments. Cryptocurrencies are usually purchased for the long term, so not needing to sell them when an investor needs money makes a lot of sense. Additionally to the need for liquidity, crypto-backed lending has opened a big door for people who want to widen their investments. Many people use crypto-backed lending as a tool to diversify their investments across multiple assets and even leverage their investments in the same asset. For example, people use their Bitcoin to get a loan and purchase Ethereum or even Tesla stock, or some people use their Bitcoin to get a loan and buy more Bitcoin.

What is the current situation of the regulatory landscape for cryptocurrencies and crypto companies in Europe?

The regulatory landscape is very different in each country, and each country has its own rules and regulations. The simplest way to understand it is to split this regulatory landscape into two parts:

1. Rules and regulations for cryptocurrencies: mainly focused on taxes.
2. Regulations for cryptocurrency companies.

Cryptocurrency taxes vary on a country-to-country basis and go from zero tax rules to taxes on gains above a certain amount, and all the way to fixed taxes on any capital gains. Portugal, for example, has zero taxes on cryptocurrency gains if those gains are not related to a professional activity (i.e. if the person trading is not a professional trader).

Regulations for cryptocurrency companies, on the other hand, are becoming more standardized across all countries. Most countries now require crypto companies to register with the local regulatory authorities and comply with Anti Money Laundering directives. In the UK, for example, all crypto companies need to register with the FCA. In Spain, all crypto companies need to register with the Bank of Spain, and for companies operating out of Portugal, they need to register with the Bank of Portugal.

What strategies does Nebeus have in place to adapt and navigate the landscape to ensure that you are compliant with all regulations in the countries in which you operate?

Nebeus’s core business and all crypto-backed lending services are provided by Rintral Trading SL out of Spain. We have just recently registered Rintral Trading SL with Sepblac, the Bank of Spain’s executive service of the commission, for the prevention of money laundering offenses. We are now registered with the Bank of Spain and report any suspicious and potentially fraudulent activity directly to them. Additionally, this week we are applying for the European Union’s MiCA (Markets in Crypto-Assets framework) registration as a Spanish cryptocurrency company. Once the registration goes through, we will be officially approved by the Bank of Spain.

Nebeus also has a UK entity: Money-4 Limited. All of Nebeus’s technology is developed and operated by Money-4 Limited, and Money-4 owns all of Nebeus’s intellectual property. We have plans to expand into the UK and launch a separate Money-4 brand that will issue non-crypto-related loans. For this, next week, we are applying for a UK consumer credit license to be registered with the FCA. Eventually, we will also like to add crypto services to Money-4, and for this, we plan on applying to the FCA to register as a crypto-asset company.

What are you currently working on at Nebeus? What should we expect next on your roadmap?

We see how our users use Nebeus, and we want to help them achieve what they want with their loans in fewer steps. For this, we are working on developing several new crypto-backed lending products and several new services that will enhance Nebeus’s crypto-backed lending experience. I can’t get into too many details and reveal all of our plans, but I can briefly talk about one product that we’ve been developing for a long time: the Nebeus credit card. Our card is approaching its final stages of development and will allow Nebeus users to access instant credit lines using crypto that they hold in their Nebeus accounts. We plan to release the card to our users in the first quarter of 2022.

Do you have any more information to share with our readers today?

If you don’t yet know Nebeus, download our app, open your accounts, and give us a try!

Make sure to also follow all of our social media channels and have a look at our blog. We publish a lot of informative and educational content focused on cryptocurrencies and blockchain technology.

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