Today I'm super stoked to be talking with Grant Blaisdell, Founder and CMO of Coinfirm - one of the world's leading blockchain regtech firms! We will be discussing the potential of blockchain forensics, AML compliance and all things entrepreneurial. Don't miss this one!
https://youtu.be/5qUZEQRVFNY
Fore more informaion, please visit https://greenlight.digital
Hello everybody and welcome to Friday’s strange soliloquy from a very secluded soapbox. Today we like all Fridays, we’re going to have a somebody really exciting on and it’s good that we’re going to talk about all things, you know all the changes that are going on we’re going to talk about their their project, which is really cool and very interesting. We’re going to talk about blockchain, we’re going to talk about, you know, just how to how to look at your business and prepare your business and come out of these strange times on top. So I’m really happy to say that today we’re going to have Grant lacell. He is the founder and CMO of a company called coin firm. I think I’m pronouncing that right. And yeah, So with No further ado, hey, Grant, welcome and thanks for being on today and talking with us having a conversation with with all the people out there listening to us.
Dennis, thanks for having me. Appreciate it. Yeah. So where are you located? where we’re at right now I’m in Warsaw, Poland actually in the coin firm office. So I don’t know if anyone can see there’s a little kind of view over there of Warsaw. Yeah, that’s where I am right now. It’s where I’ve been for a while since beginning of kind of lockdowns formally, I think Poland kind of restricted some travel stuff, maybe even before the West but I’m not sure actually. Yeah, okay. Well, I’m actually in Spain. So we’re both in under pretty pretty tight lockdown. We’ve been under lockdown for a month, a little over a month now, which is in the cabin fever is definitely an issue. So these live streams that we’ve got the office close by, so you know, and and it’s a big office like 1300 square meters, and I’m the only person here so I have a lot of space. Let’s see. Okay, all right, we won’t we’ll have to talk about is that is that a good business decision to have that much office space for you all by yourself? But well, you know, we’re gonna, we’re gonna probably be changing that, you know, one thing that all this is, is kind of exposed. I think actually, a lot of companies might act a little bit too radically in this direction.
But one thing is definitely exposed is that, you know, most or a lot of positions where people were in the office, they don’t really need to be that they can do it remotely successfully, but also at the same time, and there’s been some, you know, recent articles around this is that if people are relatively quickly learning that they don’t really want to work from home. You’re right, yeah, there’s a certain value emotionally, psychologically, spiritually, you know, in your relationships at home, of having you know, your Your drive or your commute, and then having your place of work. And a lot of people, you know, are actually working more hours now because, you know, there’s almost like an expectation that you can answer anytime because you’re always home. So that’s right. Yeah, it is not sacred anymore. You know? Yeah, there is something to be said, you know, I’ve, you know, I’ve managed remote teams for a long time now, and there’s a little bit of both, but having, having a, you know, even if you’re working at at home, we need to have a, what I would call a work ritual, you have to, you have to make a difference. It can’t be that your 24 hours at work.
You know, and I think that’s kind of one of the things that people have to realize as well, okay, even if you’re working at home, you need to have a space that’s only for work and you need to, you know, if what your deal is, is, you know, get up, get dressed, put on your suit and tie. If that’s your deal, then you should still do that. Even if you’re you know, even if you’re a barefoot it, you know, and nobody knows, right? But there is something about how to dress you know, relatively nice and not get to bum you no matter what, you know, is, is going on, you know, the thing around that is, is I think, you know, having, you know, a certain sort of habit and structure, you know, is important for most people, you know, founders like myself, you know, and my co founders, you know, working, being kind of 24 seven minded is just kind of what you have to do, especially for the first X amount of years. Anyways, the expectations for people such as us compared to you know, standard employees, etc. is is, you know, obviously should be a little bit different. Yeah, of course. Yeah. Yeah, that’s, that’s for sure. So, Grant, you know, I was talking about it last Friday. We had a friend of mine on he’s a he he’s, he’s running a startup in Silicon Valley and in San Fran Cisco, and we talked a bit about that this was going to change a bit, the sort of the focal points of you know, you know, not long ago to be anybody as a startup you had to be based in, you had to have, you know, boots on the ground in San Francisco.
And I think that’s one of the things that’s changing is that, you know, now we’re starting to realize that where you physically are, isn’t that big a deal? And, you know,I think I think there is a little truth to that, but not as much as people may think Silicon Valley itself is very kind of hype based. So whatever. hypee as far as even, you know, mentality or thought, you know, is here today, gone next day, you know, blockchain was super hyped and Silicon Valley, they’ll throw money at, at loads of things, and then the next year, they’re like, you know, so I, you know, and I’m also not convinced of that in the city. Because the US markets the US market and relationships are what matter? And you know, like I’m a hands on kind of creative guy. So I actually like physical. The physical closeness, you know, of working with with someone. And, you know, I don’t I just don’t see. I don’t see human nature changing long term when it comes to that aspect. I hope it does in the sense because that will force Silicon Valley to apply their kind of capital and funding standards towards startups in you know, even in Poland or where were headquartered in London, whatever it may be.
Because Silicon Valley still does represent the highest order kind of valuations and these sort of things. So I hopefully that pushes them further in that direction permanently. But I don’t think that is going to change the Hey, well, you should have one of you know, the CEO or You should have certain members of your executive teams management teams on the ground in the markets that really make the biggest difference. You know, so for us, that’s New York more so maybe even then Silicon Valley Silicon Valley for the funding but New York more for the client base. Um, so I just really don’t see that changing. You know, and it’s it’s also cultural, like people live in San Francisco because the San Francisco people live in New York because it’s New York and everything is there. You know, and and people are gonna get tired of this. Zoom, you know, stuff. And I’m a big believer that human nature is really, really radical to change. And usually you have to do great amounts of pressure and oppression to to change it. True, true. Yeah. One of the biggest lessons I’ve learned as an entrepreneur over the years is that you don’t try to change people you try to make get the best out Get get people to do what they do best. Yeah, don’t try to change them.
Yeah too many I see that also in kind of like startup founders and stuff too many people. Too many people instead of instead of taking you know, let’s say I’m a I’m a spear instead of sharpening a spear, you know, they kind of dull it because they want it to fit into something that’s a little bit more of what they want. Right? And yeah, they want you to be a hammer instead of a spear and right, right or whatever, you know, whatever it may be, I’ve kind of experienced that because you know, I’m in a, I’m in a, not just a high tech world but you know, in the financial and kind of regulatory stuff based off what what coin firm is, you know, and that’s not my background. My personality said I’m a little bit more kind of aggressive, artistic, creative type and and you know, sometimes you kind of have to To adjust Of course, but you’re trying to change me at my core is is not going to lead to better results. Definitely not so. So Greg, tell us about coin firm. Tell us a bit. I mean, I I put it up here. You’re a reg tech company, right? Yeah. So let’s start there. What What the heck is a reg tech reg tech and why? Sorry, go ahead. keep interrupting. Yeah. And why would anybody care? You know, a reg tech is short for regulatory technology.
It’s kind of behind the scenes things that the average person doesn’t see or doesn’t know. I’ll get into specifics of what we do but the the applications of regulatory framework standards etc means something to operations of companies and industries, how they grow, what they’re able to do, etc. solutions or procedures For example, in the financial industry in the traditional financial industry, such as anti money laundering is extremely ineffective and inefficient. It’s about 2% effectiveness, lots of manual work, lots of labor overhead, with not such great results as I as I stated, and, you know, it’s a big barrier to entry for small enterprises, startups, etc, to kind of cover that, you know, have a team of compliance people to handle things like that. So, you know, why, why a company like us is important in this space is were globally known as one of the leaders of analytics in AML, anti money laundering solutions for blockchain assets and cryptocurrencies. So we’re kind of flipping the script actually on what AML is overall, up until this point, so like I said, 2% effective, effectiveness inefficient manual, so we flip that for To where it’s pretty much automated near real time, in the 90 percentiles of effectiveness, affordability, easy to use, so that not only are we just totally changing the game around around how this is done, but we’re opening the market up and, you know, lifting weight off of the shoulders of small medium enterprises, startups, etc, increasing, you know, market transparency, market security, and increasing competition, which is good for everybody, etc. Like that. Yeah.
So here’s a question for you. You say that, you know, okay, and money laundering initiatives usually have a 2% effective, you know, 2%, effective, traditional finance. Yeah. Could that not be by design? I mean, isn’t that maybe that they want to look like they’re doing the job and not actually do the job? Yeah, a bunch of it’s a circus, a bunch of it’s a circus. And you know, the Let’s say the negatives or the penalties hasn’t outweighed maybe some of the gains for some of these institutions, if you look at the scandals, you know, around, you know, cartels, where they would literally have like their own box at the bank, they’ll just put briefcases in, you know, and you you muddy it up in the background that hey, you know, we’ve followed we, we check, you know, it’s kind of it’s checking off the boxes, you know, for the most part, right, but as I’ve you know, I’ve me personally, I’m not, I don’t like authoritarianism, of any kind, you know, I have a general distrust towards federal centralized governments, or similar types of bodies, you know, these kind of global types of bodies. But with that said, There is reason that these things do exist.
And one thing I’ve noticed is over time, you know, being in this space for you know, almost around five years now is that the it’s kind of the market naturally evolves that way, also through its business owners, you know, so if like I’m a cryptocurrency exchange, and let’s say somebody else got hacked, and those funds end up on my exchange, and I process them. And then you know, you dig that out, I got some big problems, right? I got to answer what the hell’s going on where that went, then it becomes a big headache and could be extremely costly to the point to where, you know, could threaten your business overall. So, you know, I don’t, it’s not just like some oppressive state sort of thing, actually, it has its reasoning purposes. And, you know, in the crypto space lots, especially in the beginning, lots of people kind of had an ideological bent towards it, right.
Especially towards anti procedures like that, that we’re providing solutions for, until they get hacked. until they get scammed. Yeah. And you know, and then, you know, they get a little bit better if they’re, if they’re honest and clean. critical thinkers. So, you know, where we view ourselves for blockchain and the crypto space, we view ourselves as the bridge between that economy and the traditional and mass economy. And we’ve shown that, you know, through working with some largest crypto exchanges, like by Nance to work in with financial institutions to work in with major protocols. So, without, without us, you know, the space wouldn’t be able to actually grow and potentially reach its intended potential. I totally agree. I mean, the laws are there for a purpose, right. I mean, in the end, we, you know, we should be as an industry, we can’t ignore the fact that it’s bad to rip people off. It’s bad to scam people, you know, that the protections are, you know, the legal framework is designed, it doesn’t always work like it should, but it’s designed to protect, you know, protect people. And like you said, it’s bad For Business if you’re, if you’re, you know, participating even unwittingly in in some, some of these, you know, deals, you know, it can come back and bite you. So you know what, you know, I think maybe tell us a little bit more about how coin firm works and how it actually attacks that problem. Yeah.
So, you know, if you if you kind of inherently understand, you know, blockchain especially, you know, public ones, or even the private ones, you know, like we built an AML layer for MFG banks and big coin it’s on on hyper ledger. So, you know, that’s like a private enterprise blockchain. But, you know, other than Mineiro, pretty much. You know, if you understand blockchain, you understand how to apply you know, like our proprietary analytics risk flagging scenarios. Like I said, you cannot just change how AML is done. But, you know, you provide just a whole different sphere of transparency to the market and truth to the market. Right? One of the biggest criticisms of everything in the financial market is it’s not transparent at all whatsoever. You know, you have no idea what’s going on in the back. It’s loads of these separate databases with that they can go in and edit and change things around. Right. So what comes to us, we provide an A to Z solution in that through the coin for AML platform. So you know, the average the normal activity that’s used on ours is or like the main start point, or AML risk reports. So let’s say you’re an exchange and you have a transaction coming in, that’s coming in from some sort of address. You ping our API that’s digging into our database, which from what we know is the largest structured blockchain database in the world because we have the largest coverage on the market. We push that through around 300 proprietary algorithms 300 risk scenarios. So in about five seconds, on average, you come back with the full AML Risk Report.
What’s in that? So first thing you’ll see is we have, for example, most, most wallets owned by most exchanges identified through various, you know, various processes. So if we do have something identified, we will name it, they’re not an individual, right? This is what this has to be. So it’d be a website, it would be a company. You know, if we see it’s related to a hack, we could still have an unidentified profile, but it would say, you know, it’s related to you know, by Nance hack, right. After that, you would have our C score, which is our, our zero to 99 risk rating. Obviously, the higher the number, the higher the risk once you get around 60 Six and above that’s deemed as high risk. And underneath that you have loads of these, you know, kind of financial analytics, etc. But the main thing is those risk indicators that I mentioned those 300 risk indicators. So you can see exactly what this entity has done is tied to been exposed to, etc, that contributes to that C score. On the basis of that, you know, majority of the time an entity will make a decision, right. But let’s say there’s something they want to dig a bit deeper in, they can just within the Risk Report hit for example, visualize right now open up our visualizing tool. It’s a forensic tool where you get to actually go and dig deep see all the connections, all the bubbles, all the transactions and funds and where it goes and connects.
So you can see you know, two weeks ago a piece came out and coindesk you know, where it shows off kind of how our visualizer because we trace some some symptoms scams that were pretty much people were using. were stealing kind of the identity of coin desk journalists to solicit funds saying that they will write about you on coin desk, right? So we follow that. Some of it ended up on some known kind of exchange type entities and crypto, right. Also we have around there, we have our monitoring panel. So instead of, instead of them having to, you know, ping the API, when the transaction happens, they can just, for example, put in their hot wallet. So that’s constantly tracking what’s going in and out of it. And if something comes up, for example, that is worth, you know, it has a higher risk or something like that, you know, they get notifications, then they can go in and generate that Risk Report and then go to the visualizer. Right, and then we also have a case management thing with it so they can put it all into a case. So later on the compliance officer can you know report it as a suspicious activity report? Right, it’s our do what they need to do around around that. We also have a search thing in it so you can search addresses and and see what it’s tied to what’s the risk of it.
And, you know, we also have an initiative called reclaim crypto. We did that with crude oil and Duff and fell as partners to where it’s like the first public end to end, reclaim solution for stolen hacked. scammed crypto. So we’re working on some of the biggest cases in crypto history around that. And then last but not least, we have the AML t network, which is a global crowdsourcing system so people can input data into our systems. Our data science team goes through it if it’s valid, it gets implemented, right. So if somebody got scammed, they can introduce that stuff. And then let’s say binance. Those funds end up coming in on by Nance by Nance hopefully by that time can see that they’re related to That scam and act appropriately. Right? So is that something anybody that’s a crypto user can can can use? Yeah, yeah, you can just go on a multi coin for calm and you can input the crypto address evidence, you know which type of flags you think are appropriate for it submitted and our data science team, we’ll go through it. We have things called network members, which are usually like exchanges or data providers in the space, that that they get rewards for it, you know, they join the network, and they get rewarded for it. So we incentivize, let’s say, you know, good behavior and transparency and safety in the market.
Uh huh. Okay, is it Okay, question for you is what happens behind the once the funds get to an exchange? Is that completely opaque? Or is there information as well? Because, you know, that’s always the question. You know, somebody scans you, they send you direct. Yeah, that’s why it’s it’s very important for exchanges to have these sort of things in place. R