Dear Crypto Community,
We at Koinyx have strive over the past year in order to bring you an innovative, quality, and secure product. We have spent countless hours with the team in place to capture what we believe is a better exchange than most exchanges out there. Between our technological superior back end engine, the innovative interface, and handling the legal and compliance issues, the amount of work put into this without external funding is nothing short of amazing for this team.
Sadly, at this point in time we can not continue to go forward without some sort of funding. Koinyx could launch today, but we want to ensure that we have done our due diligence and secured the proper funding in order to pay for what we believe is quality protection, hosting, customer service. It is more important to us to launch a full quality product, rather than half assing it and releasing something that would not bode well for our future customers.
Beyond the cost of standard items we need to cover, we must also be able to meet compliance laws. Across the world everyday the legalities of crypto currencies are ever so changing. And today's day and age is vastly different from a year ago or even 6 months ago. We have been lucky enough to navigate these complexities, but the cost of compliance is too much for any start up to bare without external help.
A perfect example of the cost of compliance is the infamous New York Bitlicense, where the cost of complying with regulations far exceeds a start ups ability to enter the space. The massive undertaking includes not only paying for the license itself, but also preparations for it and complying with all aspects of it. Companies who have applied for it have spent between $50,000 and $100,000 in order to enter New York.https://bitcoinmagazine.com/articles/companies-leave-ny-coinbase-submits-bitlicense-application-1440025274
However, it isn't just New York that Koinyx has to worry about. There are 40 states in the US that has some sort of regulations for crypto currencies. Some are minor, but some are as bad if not worse than Bitlicense. For example, North Carolina requires a business to have a $250,000 surely bond, and $150,000 liquid amount based on $1 million in assets and further increases as assets increase. In addition, some states at this point in time are "winging it", and only provide guidance after thorough investigation into the company (which could be good or bad if they were basing their guidance off of small versus large business, but often times its more about the ability to pay instead of helping small businesses).
We were also looking into opening in Canada and the EU, but again we need a bit more time to research legalities in order to open up in those regions.
Koinyx is not dead, we have put too much time and effort into this project. We are just on hold for a short period of time in order to secure desperately needed funding for this project. We as a team refuse to release any product we are not satisfied with, and it is our hope that someone can realize our dream of helping Koinyx launch and further develop the Koinyx platform in order to help not only the crypto communities as a whole, but also help in spreading adoption to cryptos for the world. We have more ideas than becoming just another exchange, but without investors we are not able to realize our dream.
Andrew Vegetabile and the Koinyx Team