EB43 – Is the Isle of Man building a haven for Bitcoin businesses?

Transcript

[Music] hello welcome to epicenter Bitcoin the show which talks about the Technologies projects and startups driving decentralization and the global cryptocurrency Revolution my name is Sebastian KU I'm Brian fan Crane and we have with us today uh Shan Jones hey Sean hi there guys lovely to to be back on the show thanks for coming on and uh so today's show is uh we brought Sean on because she just came back from crypto Valley Summit in the aisle of man and we wanted to get her impression on the conference and also uh she did some interviews there for us and we'll comment on those interviews and sort of give you an idea of what's going

on there in that little island somewhere off the coast of the UK um so sh how was the uh how was the conference absolutely fantastic I was so invigorated by going to a conference that kept me stimulated from the moment I arrived to the moment I left and to be Beyond in fact I stayed uh on the day later and had some really interesting uh talks and discussions with people during and after um it is it it is really refreshing to find a a conference they they called it a summit and and it really was it was this was a summit This was um that there was just a buzz and an interest which I have not seen for a

very long time uh at a crypto event so they did a fantastic job brilliant and perhaps we could just kind of explain to our listeners who maybe don't know where the Isle of Man is and I think a lot of people have heard about it and and know that it's somehow attached to the UK and it's part of the Commonwealth and but what what is the is of man where is it uh who what what goes on there okay well the Isis of man is um an island that sits pretty much equidistant between England and um the island of Ireland so um kind of off the north uh west of England uh between it

and um Northern Ireland and it's it's so it's right there in the middle of the Irish sea it's a self-governing uh British crown dependency so it's entirely independent um but it it has the same queen that we have in uh in the UK um it's got the oldest parliament in on the planet um older than any other Parliament um and it's very proud of that that tradition um it's been doing really well with attracting new industry being an island and this island has around 86

87,000 uh population now it struggles uh to keep um its population um you know there are more attractive things elsewhere and so it's um it needs to to to to to stimulate its economy and it's it's been doing this really successfully in a whole range of sectors and it announced a few months ago that it was going to welcome crypto businesses and it um it certainly has um delivered on that um judging by by The Summit the summit was organized uh partly by the uh by the government um so it was

sponsored by the Department of Economic Development and um it's been one of the main sort of commercial sponsors for the event was KPMG one of the big four uh Global advisory businesses and that that just goes to show the kind of quality of interest it's coming from government it's coming from Big Industry and it's coming from all the different support Industries on the island and it's really unprecedented for sort of you know a conference to be spearheaded by the government of a Nation I mean it's it's very interesting and I of course it's a small island they they want to stimulate uh new Industries there and be sort of a a place where people come to to start

new types of businesses and in fact you know historically they were were uh one of the places where online gambling first started to flourish back in the early 2000s I think that's absolutely right uh the e-gaming has been um a huge success for the island um they recognized that um as a lot of the rest of the world was um switching off um e-gaming that they if they regulated it properly and used the infrastructure that they had on the island for dealing with financial services industry and build on that that they could create a new industry there and and in fact that

um to begin with they made a few mistakes and um they used it to to kind of provide a template for uh new EB business uh to come to the island and and I guess to a certain extent they've used what they've learned with e-gaming to um to attract um crypto but if if we look at um um employment on the island Um poker stars which um uh in its early days set itself up on the island man had just a handful of people and now employs several hundred um and um uh so it's it's Pro real business and I believe Poker Stars accounts for something

forgive me if I'm wrong here but something like about 80% of all online poker is is is played with this one company and it's based on the island man counts I think e gaming accounts for something like about 14% of GDP now so they they've certainly had a track record in in attracting new Industries in fact I I had a talk um with uh Peter Greenhill who is the director of e business at the Department of Economic Development so that's part of the irland man government and they're the people spearheading the uh the drive to attract uh crypto businesses to to the island man and um he had some really interesting things to to say about um

about the place of the island man uh in in crypto and indeed why they've they've got into it so this is sha Jones uh on my last day on the aisle of man uh having attended crypto Valley Summit um which has been organized and sponsored by the Department of Economic Development part of the government here on the island and I'm sitting with Peter Greenhill who's director of e Business Development and whose remit therefore includes crypto absolutely um Peter this has been a very intensive uh two days so starting lunchtime yesterday through to

lunchtime today um packed I have to say there was a tremendous buzz and a wonderful feeling um uh more lively and energetic than any um uh crypto conference that I've been to for a very long time um do you think it's it has it worked for you here on the aisle of man as a as an event absolutely I mean that we were hoping for that sort of Buzz uh I might have been expecting that sort of buzz but you can't understand how comforting it is that we've had that sort of Buzz I me we've had uh a tremendous number of sea level Executives arrive from all over the world um who are right at the heart of

the digital business not just digital currency but the whole aspects of the blockchain and what it can do coming to the island to meet with Island experts um that could help them to set up their business in any way that they want to uh the the fusion of those those two groups of people has been absolutely brilliant um you've experienced the buzz yourself it's been it's been very very strong indeed why is it that the man has decided to engage with Krypto and welcome Krypto um onto the island to what what what started that we got a bit of a history of uh looking at Innovations in uh in industry in

business that we could adopt here on the island that we could provide good service to um we need to grow our economy we do that by growing jobs um but let's go back to um e-gaming we welcomed e-gaming companies to the to the island but only under very strict uh regulation so we set the bar higher we attracted the top end of the market we made sure that we protected players all the time uh by insisting that players funds were segregated what that did was create um another Buzz a buzz of the gaming industry not just the operators we attracted uh the biggest and best software operators in the business uh to the ISA man to set their headquarters

here suppliers to that industry um came as well and the the island itself grew so the whole area of data centers of telecommunications capabilities grew exponentially through that environment we're looking to do the same thing obviously and pro and with the services we already have here to put that into the digital world and of course now you've got the the infrastructure here on the island which maybe you didn't have at the outset with e gaming that's right we had to develop it with those companies but now it's there and it's readily available and we can turn it immediately into to helping the people who've been here this week and you're not just looking for people to hang their brass plates here you you want to

bring people to the island very very yeah very definitely um we're not a brass plaque Island um we want people to come here we want them to to grow um their jobs here so you know if we go back a few years to a gaming again just to to use that that analogy Um poker stars started here with uh four people they're now well over 200 they've now been sold this year for $4.9 billion a good growth story great success story micro gaming the same thing arriving with a couple of people growing to well over 200 staff here and so what you what you're hoping for I guess is to have similar success with uh crypto businesses that maybe start quite small here y uh where the founders might

settle here and then start to expand and hire local uh local create local jobs exactly and and those those could be local jobs of employing people who've come out of other areas um there's a lot of people who are excellent at compliance on the island at customer service who are seeing that Financial Services on the island and and worldwide are shrinking they can then move across into jobs within the digital world uh but also I mean it's attracting new Talent as well we can actually see um for example the uh technology experts who are really creating things around the blockchain at the moment starting perhaps creating applications relating to digital currency on the island but

then they'll be based here they'll grow they'll attract students from our University here that we're setting up to grow into uh a fascinating environment for the future and that'll all happen here and not a lot of people I think realize that the island man is um owns a lot of what's in space I think a lot of satellites actually yes there's an awful lot here I mean there are several sectors that people we don't we don't sort of perhaps uh fly our flag as as high sometimes as as we ought to uh but yeah space sector um aircraft registry uh shipping registry very very strong on the island so yeah there's lots of areas that people can can enjoy here well after what I've experienced in the last

two days I would highly recommend uh any uh budding uh crypto innovator to to to to check out the a of man Peter thank you very much for for hosting the whole event and for uh doing such a splendid job of it all the people from the alaman government who participated have done a phenomenal job thank you for your time this afternoon uh sharing your thoughts with epicenter Bitcoin thanks very much indeed thank you so as you heard from from Peter there they have a real track record of attracting businesses and and these businesses include Aerospace um as Peter mentioned uh Aviation and and Maritime

Registries these are sort of more traditional although you know in in Aerospace they I think something like about 40% of all the satellites circling the um the Earth are um are owned um by businesses and managed by businesses that are on the island um they manufacture um uh Parts I think the landing gear of all Airbus uh aircraft are actually manufactured on the island so there's there's real um concrete uh tangible business going on there um they've got of course the e- gaming that that that that's been talked about other areas of

e business clean technology biof Pharmaceuticals biomed these are uh real industries that they've attracted to the island and that are successful there yeah there's two things that I thought that were interesting one is that you can you really get the impression that uh the the the aisle of man is is is is is looking to uh create jobs there they're not they're not looking for a place where uh they're not um they don't want to create a place where people can just have brass PL plaque um businesses as he as he stated and the other thing that's interesting is when he when he talked about the gaming industry maybe about 10 years ago one thing that they worked uh to put in place was segregation of client funds which is

sort of something that we're often discussing in the Bitcoin space so I think that they have there's a lot of uh experience that they would have gained from working with egaming that carries over to the Bitcoin space because we are talking about financial uh transactions and financial services and um and a lot of that knowledge perhaps that that that we have on the island can be carried over to the Bitcoin space absolutely and I think um they they've got a a track record of understanding that not every business is um uh uh if you like um modeled on traditional financial services so as you say they they they they adapted an understanding of finance and applied it to to e-gaming

which is different um and I think the approach they're taking with crypto businesses is similar they are saying you know this isn't a traditional Financial Services business so unlike um New York for example unlike um uh Europe which is at a much earlier stage but uh we we mustn't forget that the European banking Authority came out with its opinion a few months ago and there may well be consequences um flowing from from that uh report um they're saying this is not uh necessarily a traditional Financial Service this is something new and we will adapt um to to to to achieve the right aims to protect consumers but uh

not necessarily using the same tools and I think they they're very wise in taking that approach and that's one of the reasons why the island is is um going to be a very crypto-friendly place I think the other aspect of course is that uh they understand Banking and payments they do have a long tradition in financial services and in payments uh the number of um uh payments businesses small Banks um payment process accessors one sort or another treasury Management Services on the island and um indeed it it was somebody from that background uh

guy called Paul Davis from Counting house who probably could be credited with with starting um to get the island man government interested in in crypto and getting crypto businesses to come to the island um he he he was involved in the early days of of e-gaming and the pay providing payment Services free gaming on the island and so he was very well placed to um uh really to pick up on that theme and he he got um I I I think I credited him with um uh lighting the blue touch paper that's that that now given rise to to crypto Valley Summit and and the real businesses are already starting to set up on the island

um and he recognized the importance of payments and indeed um it is the availability of payments services at a time when banking is not open yet um not readily open yet anyway to to crypto businesses yeah perhaps we can address that question a bit because I've heard you know at one point people were saying in Yaman one can get bank accounts for Bitcoin businesses which is something that hasn't been possible in the UK um at least for the most part and then I know there were some use just around the conference saying that um now this has been reversed and then I was

writing about it in the newsletter and you you were tell me that actually the news stories have been kind of wrong so can you just kind of clarify what exactly the situation is at the moment for Bitcoin businesses who want to get bank accounts in di man um AB absolutely um one of the existing um payment support indust businesses on the islands company called uh Capital Treasury and they provide treasury Management Services so they handle payments on behalf of of companies all over the world including those of course that are based on on the island and they have the infrastructure and the uh facilities to

to do that uh at scale and they were offering or beginning to offer uh banking or payment services they themselves are not a bank but they were able to offer payment services um to to um to businesses and had started to to open some accounts for uh for for crypto businesses and the day before crypto Valley Summit um they had to announce that they had had to close their crypto businesses or will in in the course of the next matter of a few days and weeks to do so because their Bankers had withdrawn the facilities um to provide banking had basically threatened to

close their accounts entirely if they didn't close their Bitcoin uh related business uh this was obviously a very unwelcome piece of news just on the eve of uh the summit um now Capital treasury themselves not a bank it's not their fault and it it turns out although it was reported that it was HSBC and Barkley it actually appears not quite to have been the case there was a different bank involved and the history uh the story behind it wasn't necessarily an automatic aversion as there has been elsewhere to crypto businesses but rather as a result um as I understand it of a fraud uh that had

been perpetrated um using one of those accounts and of course this had kind of red flagged that business through their fraud systems and they felt that there was a higher vulnerability a higher risk as a result of of of of this one fraud that it could happen again and so on and so forth and it was that that triggered it so it's it was really an unfortunate set of circumstances frankly it could have happened in in any sector and it um it just so happened but in another sector if it happened somewhere else it probably wouldn't have been that now no more e-gaming businesses can do business at all well they had this problem e gaming had that problem early on I mean it's it's taken a while uh um certainly the island man payments industry has

been instrumental in in providing payment services um because it has a very high reputation because they operate a proper um anti-money laundering regime on the island they're um they're not on anybody's blacklists they're considered in fact they have very high ranking in terms of their regulatory framework um they they've been able to provide if you like provide that lever Le level of confidence for the for the banking industry in being able to do banking in high in what I perceive to be high-risk areas yeah so what do you think the situation is going to look like in the future do you think uh will there other Banks be that step

in well absolutely and and Paul says something about that um in uh in his interview with me so this is Shawn Jones on a sunny day in the aisle of man uh somewhere between um England and Ireland a little island in the Irish sea uh that's hosting crypto Valley Summit and one of the speakers uh today is going to be Paul Davis and he's very kindly giving me a few minutes of his time uh Paul tell us a little about your involvement in the uh virtual currency space it's very new if we turn the clock back 18 months I didn't know anything about virtual currencies but a friend and client of

mine Nick who lives in France had the idea of establishing a Bitcoin exchange on the AIS of man he had some preliminary talks with government officials here and wasn't particularly happy with the quality of the responses that he received thought he'd probably gone about it a little bit wrong sat down with me and asked me to help him in formulating a better approach to the government as a result of that I did a lot of reading very very quickly I then did help him with his formal approach and elicited some very forward thinking and positive ideas from the Department of Economic Development and from the financial supervision commission and my entire involvement in Virtual currency has been built on that fortuitous event having done the job for Nick I was then

approached to advise a number of other companies that were coming here and I realized that a major opportunity was in our hands I went to the Department of Economic Development I have a good friend there Ray Davis who also had been looking at the virtual currency space and had gained some knowledge and the two of us decided to present it to the Minister as an opportunity for the island we were then lucky again there's been a lot of falling on our feet in this process John Spelman the senior economic adviser to the government became very involved was full of ideas articulated them well the minister became excited the CEO of Economic Development became excited and the rest is history today we have about 60 companies on or looking at coming to the island and literally hundreds of people

showing up for this Summit to hear about what we have to offer well you're largely credited with having um ignited uh the or lit the blue touch paper of virtual currencies on this island because your your your involvement up to then was in providing Payment Solutions for uh the e-gaming space which is something else the island is well known for correct my company counting hous is involved in consultancy and facilitation of payments largely focused on e-gaming whether I should be credited with getting the ball rolling I think is questionable and I would also point out it could be a good thing or thing depending on where it all goes I don't think it's a foregone conclusion that this will be the Seventh Wonder of the

modern world yet well um we we shall see there was some news yesterday um that uh one of the Island's treasury management businesses um were told in no uncertain terms by their banking Partners their clearing partners that uh they had to drop uh Bitcoin businesses which uh they they were starting to take on on their books um obviously a piece of bad news and what what's what's your view about that well there's no doubt that access to the UK clearing system is a bit of a barrier for Bitcoin companies not only on the island but across the planet because England is a very fertile market for cryptocurrencies you know when you climb a mountain not every step is upwards

sometimes you have to take a step or two back retrench figure out a new route to the top and then get going again and that's been very true of the whole progress of the virtual currency field the good news is that around 2:30 this afternoon during part of my panel I will be announcing that some alternative Arrangements have been made and our native Industries here that are involved in the Bitcoin space will be able to access new and probably in some ways better banking relationships courtesy of a deal that was struck over breakfast this morning well this is hot news um for sure are you prepared to share some more detail with us no but there's new news uh and and is good

news and that's what yes and based on chats I had with the speakers over lunch I'm not the only person that's going to be dropping some Dynamite news into the audience this afternoon that's wonderful we remain very very positive about the future cryptocurrency on the aisle of man so it's not just the government that's supporting it with a a regulatory regime that that's very light um that ensures that the reputation of the island and the island standing is maintained while at the same time being attractive to Virtual currency businesses but um other businesses and players on the island who've taken steps to make it happen yeah in so many fields of endeavor there are people that think the glass is half empty and people that think it's half full I'm overwhelmingly

positive I mean I live on the a of man and I wear sunglasses every day if that doesn't demonstrate optimism I don't know what does um I should explain for some of our listeners who don't know the is of man that it's quite well known for being wet and windy although today we're enjoying glorious weather well for the last two months we've been enjoying glorious weather it's quite uncharacteristic but anyway you know Bitcoin and the technology that surrounds cryptocurrency is here to stay we on the alaban are very very excited to be part of it and I don't think it'll be going away any day soon despite any fears of competition or other hypotheticals that are being posed by large Banks well it's it's wonderful to hear uh it's is also a joy to see um

a a a a jurisdiction that is Nimble and astute uh and that it is actually encouraging um these Innovations and these challenging um disruptive Industries yes we we're Nimble and Fleet of foot in a lot of areas we're well known for our plays in clean tech in space in thermal engineering there's a lot going on here that's exciting and we have to be like that we're a small small jurisdiction there are powerful pressures on people to move away if they don't find satisfaction and challenges here but at the same time uh we're not about to be cowed or or bow down to large entrenched interests that think we should become a Backwater and grow potatoes and fish um unlike some other

jurisdictions that may been not quite so um Nimble and Fleet of foot and unfortunately uh losing uh losing some of their population as a as a consequence my mother had a great phrase to describe this she used to say you make your own bed then you have to lie in it we're busy making a good bed here and I think that's a a a wonderful point to uh to to to leave it um Paul thank you very much indeed for for for sparing the time today uh I'm going to listen to your uh your panel session later on with huge interest it's been a pleasure thank you Sean so what came out of that was um a panel session later that day where um

the CEO of instabil who are um a global merchant services provider uh the CEO Jason field announced uh that uh his company is going to provide both merchant services and uh banking facilities to the crypto industry um it's unclear at the moment as to whether or not that will include um access to the UK banking system to start with but um they are a very large um merchant services provider that covers and is used to handling so-called high-risk businesses and um that was a a great piece of news and it was followed

just in the last couple of days so since crypto Valley Summit with the news that natachia who are now um putting themselves into the island man setting up in the island man are um uh have come to an arrangement with w pay uh to provide payment services and therefore route into the um uh into the uh banking system and I think we will see more of these arrangements and wpay is a is a is an is Man based payment services provided so um I think we're going to have a whole string of announcements like this over these next weeks and months I think it's it's really happening there and they've got the

appetite for it and they can provide the confidence to the large Banks eventually uh to be able to handle this kind business now one thing that he mentioned that kind of stuck with me is it say 60 companies 60 odd companies are planning to set up in the aisle of man well um certainly so I'm understand at least 15 have already um set up shop on the island um we heard on the the first day a keynote address from Steve borgard who CEO of goco they've already set up on the island uh and we've heard on the um uh the the the the first evening we had a an after speech from Brock Pierce and uh his businesses too are setting up on

the island so um yeah there's some big players coming to the island and um they're queuing up um they're they're talking to the government and they're talking to um businesses like polls and other support Industries um that can help them get set up on the island get them set up for regulation get them set up um with corporations and ructure and tax and all the other good stuff I should say the island is is a very attractive place for tax as well there has zero corporate uh corporate tax corporation tax but I presume those companies uh for the most part they have their operations elsewhere right they do the the legal stuff perhaps some employees there but

then they they're not moving Aller people over there well the island certainly not interested um as Peter Green Hill set in uh having businesses that simply hang a brass plaque on the wall uh they want real businesses with real people creating real jobs I think they understand that to start with the existing players um are probably um you know going to work through representatives and um but but the in time they're really only interested in having real businesses that are creating real jobs on the island they did that with e-gaming and I think they're going to do that with crypto I think anyone who thinks they can just sort of set up

a a kind of um name only company on the is man and call themselves an is man business might find it not quite such a welcoming Place certainly not in uh in in in over these next months I think uh they're expecting people to just to at least have some staff based on the island and and I think there are signs of that already starting to happen so you have a third interview um could you introduce it of course um I guess everything we've talked about so far is is um you know very general about providing the right environment supportive government and so on but um they although they're taking a light touch approach to regulation they are

having some form of Regulation it's not going to be a completely unregulated place and they are interested in in maintaining the reputation of the island and I talked to one of the um commercial sponsors of the event um uh KPMG one of the big four advisory Global advisory firms uh I talked there to Archie watt who's head of e business uh based on the island and also Mickey swindel who's head of advisory on the island both um background in um in supporting a gaming businesses and both of them uh advocates for crypto on the is of man this is Sean Jones on the second and

final day of crypto Valley Summit in the aisle of man um a little bit Misty today we haven't got the Glorious weather that I was promised um but we certainly enjoyed yesterday and I'm sitting down uh with two uh key people from sponsors to to crypto Valley Summit um uh KPMG are one of the um big four um consultancy firms they're the leading advisers to business and I'm forunate enough to have with me uh this morning Archie watt who's head of EB business and Mickey swindale who's head of advisory and um I'm hoping you're going to tell us a little B about why KPMG is

supporting uh this new thing called uh crypto okay well if you want me to pick up that first of all Shan and why do we want to get involved with with us crypto because it's important for the island it's a key feature of the of Industry going forward you know crypto is not going to go away and KPMG is very keen and has always been very keen to work with growing businesses in new sectors that can make a positive contribution to to to life on the island and and elsewhere and I think it's fair to say we have a a track record in that area because of the work that we've done with the E gaming sector which has been a very important developing sector in the

aisle of man over the past 10 years really um and one of the reasons that Archie joined us as our head of e business was because he had so much experience on the gaming side um and we've really seen the benefits of being an early passionate advocate for that sector and I and I hope that we can do the same when it comes to cryptocurrencies um why the a of man what what what's made this place so attractive to crypto well first of all the ability to get business and government together so easily business and government here in Ireland work really closely together and that doesn't mean that uh that that business gets everything it wants from government but it doesn't mean that we can speak to government government will listen to us

and so long as it's in the best interests of the island it will go through but you know it's still a very very well regulated or entity very well regulated territory and you know we sign up to all the the best practices we've been reviewed by numerous EU and international bodies on on transparency and tax and all the rest of it and passed far far more easily than a lot of other territories Mickey would you say that yeah and I think it was interesting listening to the regulation panel yesterday which which of course you were on because um it actually changed my view slightly on the on the regulation question because it's clear that one of the big attractions of the aisle of man has been that there is a strong well-recognized regulator here and that the companies the operators in this

sector are hungry for reg regulation because those the good actors within the sector want to be able to to show that kite Mark and say look I can I can I'm checked people people can uh can attest to this and so it was interesting to hear John Spelman sort of say be careful what you wish for because you know the register initially is is is going to be a very powerful force I guess for for um AML and and and fit and proper legislation and customer protection and and I I suppose I had thought that introducing a full Prudential regime quickly after that would be the right thing it's to take a step back and think well maybe it's not you know maybe that could stifle Innovation maybe it would be you know let's not rush to to do that

so I don't know what your thoughts are on that well I I still having having spent sort of 15 years in in gaming you know you know as War B Bart said yesterday you know the the gaming sector was crying out for regulation and tax now they've got it and you know they're you know they're being taxed out of existence I think that you know War's words were very very true so I I like Mickey I thought that we should be going down the regulation route but uh we need to make sure that appropriate and fair amounts of of consumer protection kyc anti-money laundering and you know prot protect proceeds of crime legislation is all of those things are are complied with by by the good actors

here on Ireland so I I think that could be about the right sort of level I mean it's going be a balance isn't it I mean it's we don't want to kill a thriving sector at the same time want to make sure that the the Bad actors are kept out yeah well I mean the aisle of man has taken a very uh bold step and venturous step um by saying that it at this stage isn't planning to regulate um cryptocurrency businesses but instead requires them to comply with um what are broadly the the anti money laundering um laws that either already exist here on the island or um are being

amended um to to bring um bring them in line I suppose with most of the other European nations but essentially to to bring AML systems into play um and so long as that is done and the businesses are a properly run well-managed uh um businesses that they are welcome here on the island and there's virtually nowhere else in the world at the moment that's saying come here to do business uh to crypto businesses that is yeah but it's interesting there are more people coming to the party aren't there you know we we've seen it over the past few weeks more and more jurisdictions are taking an interest in this area and I think that will increasingly happen

but the Isle of man's stroke of Genius I guess was was taking early action making a bold announcement as you say back in June setting up the FSC register and and expanding in the designated business bill to make sure that it does include companies from this sector um and and I hope that stroker genius stands some in good stad we shall see as everyone else gathers around the feast I guess I think some may try and copy the the model that's been set here don't do you feel that that's likely maybe some of the other smaller Islands almost certainly mean almost certainly that's if something is good it'll be copied and I think that's you know from what you're ing around here the the

delegates here seem to think that the what what the island has announced and how they're implementing it is good and the island has a record of um attracting new business not necessarily Financial Services businesses but other form think I think the um Island man is big in space and the island man is is big in in biofarma um the to name but twoo and and and so they're not just interested in financial services so this is the right place for them to to to uh or the right time uh for them to to use the same adventurous model uh for um for crypto businesses I agree I think for any of the um of the the small business

Islands um that diversification is really important because the world economy changes as we've seen Financial Services have declined rapidly as a sector if the is of man hadn't had these other sectors which were growing and thriving and innovating and changing it would have struggled I mean John shim this morning set out some fabulous statistics didn't he about the success of the AIS of man and and and I firmly believe that without that diverse underpinning of industries that wouldn't have happened so will KPMG be setting up um a crypto office here in in Douglas well the the office is already crypto aware so so we are so we we already bought into the concept of of crypto

well I'd like to thank you both for for spending time with me this morning um I can hear in the background that people are going back in to listen to I think Bobby Lee probably so I think we U should should um probably slip back in at the back now but thank you both very much for your time today thank you Shan so you heard Archie and Mickey talk there about some of the Practical things that that that are being done on the island in terms of Regulation it's not regulation of crypto specifically although um I think in time we might well see some more specific crypto legislation come in but I don't I I

think that's some some time off um I think they'll wait and see and and they will take their time to do that if they do it at all um at a practical level they're in the process of amending their proceeds of crime act uh in such a way that it will bring uh crypto businesses into the framework of uh anti-money laundering and counterterrorist financing regimes um it'll simply be another industry that that has to comply with those rules and it's also in the throws of uh bringing in a new bill um expected around the end of this year maybe the beginning of next year uh for the mandatory registration or statutory

registration of certain types of businesses um so that there is some sort of supervision of their uh anti-money laundering uh regime and uh so this is effectively just a to create a a mandatory registration um requirement to bolster the the proceeds of crime act Provisions uh and those two things together um will will be the the the extent of regulation of crypto businesses and um will give a a very provide a very light touch um environment for for crypto businesses to start and to thrive I believe yeah I love how they they sort of have a

balanced approach where they they want to uh keep this sector thriving uh while trying to keep the back Bad actors out with some light uh AML kyc kind of layers on top of of the regulation so yes I I wouldn't say that there the a AML kyc um rules are any lighter than anywhere else they are world class and they're recognized for being so but to the there'll be it'll be light regulation in the context of the whole spectrum of of crypto business it will only be that aspect that will be regulated um uh and and that makes it certainly a light touch approach but

they're not a pushover I mean they do run their um their AML um operations um to Global standards and and they're known for it they they they that's how they maintain their reputation I think it's also worth mentioning that um the island man is in a rather curious situation it's physically in Europe in the sense that it's you know sitting there between two um two of the outlying islands the United king you know Great Britain and and and Ireland um but it's not part of the European Union so it sits outside of all the EU directives outside of all this sort of um bureaucracy that that

flows out of Brussels with one exception um under the arrangements that it has with the United Kingdom the Customs Arrangements it has it it it applies a vat system a value added tax system that um parallels the system in the United Kingdom which is part of uh the European Union so uh whatever the rules are for vat in the United Kingdom the same rules for vat apply on the island all other taxes are entirely their own business so um as I mentioned earlier there's no corporation tax unless you're a bank um

the the the other um taxation is uh is is very favorable um but V rules are not governed by Brussels in in the UK yeah effectively the rules for vat are set um in Brussel well they're set um in in a vat directive so they flow from um the Parliament and the Council of Europe through the commission um and as a um as a a result all the member States including the United Kingdom have to follow those rules however different member states do sometimes interpret those rules slightly differently especially when it comes to

financial services so as we've talked about on a previous episode um there's a um there are variations throughout Europe and um unfortunately from the island man's perspective um whatever or however the UK interprets uh vat they have to interpret it the same way um it it helps them because they they share their vat with with the United Kingdom and that that helps with their um fiscal um stability U but it does mean that there's vat so at the moment UK has a very favorable approach to VAT on crypto and uh therefore there's a very

favorable vat approach on the is man if that changes in time uh perhaps as a result of this impending uh decision by the European court of justice ice which may come out in a year or two's time uh and that will have an effect on the whole of Europe that will have an effect on the whole of the European Union I should say that will have an effect on the UK and that will have to be mirrored on the island man but right now um it's it's outside of Europe and there's a very good vat and general tax uh regime anyone who wants to find out more about um business and life on the is of man uh will'll find a website that's run by

their um their business development um their economic um development department and that's at where can.com very catchy name where you.com you can find out all about the island man there cool and so you're setting up an office there I understand well yes um I I'm so you can tell I'm so enthusiastic about what's happening there on the island um I I I think I think the um uh the facilities are there for any business to set up um as some of the listeners will know I I specialize in Regulatory Compliance and uh um it's nice to have a place where it's a light

touch regime where I can have a rather different approach to the regime I have to have in the in the offices elsewhere in Europe so yeah I'm I'm I'm setting up in Douglas which is the uh the main Center on the island and um I will be there um increasingly more often over these next weeks and months how do you get there like you take a boat or plane uh both uh I don't recommend the boat in Winter the seas in the IR SE AR SE can be very choppy and it's not everybody's cup of tea but there's some fast uh Ferry services from the West Northwest part of um England Liverpool and haam I believe um but you can fly um

all um the major British airlines uh fly there British Airways fly is there from London city and Gatwick I believe and there other airlines flying from other major centers on the in Great Britain and of course through London you can get great connections from other parts of the world cool well good luck with um setting up there and of course that also means that if you know to all those who are uh running a coin business and they're wondering where the best uh what the best options are in terms of where to set up they you know they should get in touch with Sean and perhaps uh she can help you explore the option of

setting up on the a of man well certainly and uh shameful plug but um come to coins sal. and you'll uh you you'll be able to to to reach out to me and I'll be more than happy to give advice cool well thanks so much for listening and uh thanks for especially to you Sean for producing this content it's it's really been uh great to listen to the interiew you've done uh here and also at over there and Al inside Bitcoins well uh thank you once again for having me on the show I so thoroughly enjoy working with you guys yeah well so so do we so thanks so much and of course thanks to our listeners uh for listening once again to one of our episodes so if you want to if

you want to you can follow on Twitter at enter BTC you can also leave us review on iTunes which is very much appreciated helps new people find the show um and you can subscribe to your newsletter at enter bitcoin.com newsletter and of course tips you know we do appreciate those as well so you can give us show us your appreciation on um end bitcoin.com tips thanks so much and we'll be back next week [Music]