16th National Forum on Prepaid Card Compliance

September 26 – 27, 2016

Impact of the Regulatory and Compliance Challenges Surrounding , , and on the Prepaid Industry

J.H. Jennifer Lee Tim Rocho Partner Founder-CEO Dorsey & Whitney LLP (former Set for Life Enforcement Attorney in the CFPB’s Financial, LLC. Field Litigation Team)

Gideon Samid Robert Chief Technology Schwentker Officer Founding President BitMint, LLC Blockchain University

Tweeting about this conference? #ACIPrepaid What is the impact of wallets such as Apple Pay, Samsung Pay & Android Pay on the payments market, specifically prepaid?

#ACIPrepaid Emburse: Expense Management Platform • Assign virtual or physical expense cards to employees or contractors to enable pre- approved spending. Spending restrictions via: • Time restrictions • Budget or allowance • Merchant requirements • Emburse Card is issued by Community Federal Savings Bank • Y Combinator startup - 2016

#ACIPrepaid Bitcoin Debit Card Providers

#ACIPrepaid Bitcoin Debit Cards

#ACIPrepaid Bitcoin Debit Card Providers Card Networks Company HQ Issuer Spectrocoin ATM UK Wave Crest Advcash Mastercard Belize Holdings Limited Transforex Investment Consulting Co., WageCan Mastercard Hong Kong Ltd. Wave Crest Wirex Mastercard London Holdings Limited Metropolitan Bitpay Visa Commercial Bank Wave Crest Cryptopay Visa UK Holdings Limited Metropolitan Shift Payments Visa San Francisco Commercial Bank Wave Crest Holdings Limited Visa Hong Kong (initially)

#ACIPrepaid Key Points

• Xapo: Bitcoin Visa Card, links to Xapo & PayPal wallets • Shift Payments: Links to account • BitPay: Visa debit card, also ATM withdraws • WageCan: White Label Bitcoin Debit Card • BitGold: Redeem gold balance to Prepaid Card • SpectroCoin: Buy Bitcoin with Visa or Mastercard • CryptoPay: Not required to complete ID verification for small purchases

#ACIPrepaid XAPO

• Debits purchases directly in bitcoin from your Xapo main wallet. • Runs on VISA network • Moved its Terms of Use back to the original jurisdiction of Hong Kong, pending confirmation from Swiss regulatory authorities • Xapo is a custodian of any transferred to a Xapo Wallet or Xapo Vault. • Can link Xapo Debit Card as a new payment card in your PayPal account. • Xapo use MyChoice prepaid cards

#ACIPrepaid Shift Payments • Shift Card: first U.S. bitcoin debit card. Connect Coinbase account • Vision/road map: connect everything from bank, airline mile, and alternative currency accounts to one’s Shift Card.

#ACIPrepaid #ACIPrepaid BitPay • Load dollars onto your BitPay Visa card using any bitcoin wallet. Funds are ready to spend in minutes. • BitPay card for online & offline use, also withdraw cash at any ATM. • Monitor card activity with BitPay app

#ACIPrepaid WageCan • Bitcoin wallet for web and mobile apps • Individual account daily limit is $50,000 • White Label Bitcoin Debit Card • Brand logos onto cards • WageCan rewards • Basic plan starts at 5 Bitcoins.

#ACIPrepaid WageCan Fees

Fees USD EUR Remark ATM Cash Withdrawal 1% (a minimum of 3 1% (a minimum of 3 1% for the first 5 USD)* EUR)* transactions per month, 2%/transaction thereafter(a minimum of 3 USD/EUR) POS Free Free - Overseas Transaction 1% 1% Applicable to ATM/bank Fee withdraw or POS/on-line transactions outside Hong Kong Currency Exchange Fee 0.5% 0.5% Applicable to ATM/bank withdraw or POS/on-line transactions not made in the base currency of the debit card Balance Transfer Fee 3% (A minimum of 50 3% (A minimum of 50 For users USD) EUR) broken/lost/renew before expiration. Inactive Account 2 USD per month 1.5 EUR per month If there is no transaction Management Fee＊ within 12 consecutive months, a deduction will be conducted from the #ACIPrepaid 13th month. BitGold • BitGold: buy gold easily, within 1% of official gold price • Spend gold globally, at any Point of Sale with a BitGold Prepaid Card

#ACIPrepaid SpectroCoin: Buy Bitcoin with Visa or Mastercard

#ACIPrepaid Cryptopay

• Cryptopay customers are not required to complete ID verification provided if they are happy to stay within the lower debit card limits. It is possible to stay anonymous where desired.

#ACIPrepaid Cryptopay: Verified & Unverified Limits

Card limits EUR Card GBP Card USD Card Number of online Unlimited Unlimited Unlimited transactions Single ATM €200 / €1000 £160 / £800 $200 / $1000 transaction limit Unverified / Verified Daily ATM €400 / €2000 £320 / £1600 $400 / $2000 withdrawal limit Unverified / Verified Lifetime ATM €1000 / Unlimited £800 / Unlimited $1000 / Unlimited withdrawal limit Unverified / Verified Max single top-up €2500 / €10000 £2000 / £8000 $2500 / $10000 value #ACIPrepaidUnverified / Verified Max daily load €2500 / €20000 £2000 / £16000 $2500 / $20000 Unverified / Verified Max lifetime load €2500 / Unlimited £2000 / Unlimited $2500 / Unlimited Unverified / Verified Wirex • Wirex hybrid personal banking platform combining blockchain technology and traditional finance. • Bitcoin wallet for web and mobile apps • “Wirex combines the speed and flexibility of blockchain finance with the acceptance of traditional currency in one account. ” • Each transaction charged 0.0002 transaction fee which goes to the . • Card Issued by Wave Crest Holdings Limited, a licensed electronic money institution by the Financial Services Commission, Gibraltar.wagecan.com

#ACIPrepaid • What is the current regulatory landscape affecting virtual currency provider?

#ACIPrepaid Cryptocurrency Regulatory Landscape

Source: map.bitlegal.io #ACIPrepaid Top 5 Bitcoin Friendly Countries

• United Kingdom • Bitcoin is a personal asset • Goods and services purchased for bitcoins are subject to value added tax • Barclays Bank provides US based with an account to store pounds • can account to any bank account in the UK • Sweden • financial regulator Finansinspektionen legalised bitcoin as an asset • Finland • Finnish Tax Administration classifies bitcoin as financial service

#ACIPrepaid Top 5 Bitcoin Friendly Countries (cont.)

• The Netherlands • Plan to create national cryptocurrency: DNBCoin • Denmark • Seeks to eliminate paper currency

Source: coinfox.info/news/reviews/6230-living-for-the-future-top-5-bitcoin- friendly-countries

#ACIPrepaid Which laws virtual currency providers need to worry about and what is coming down the line?

#ACIPrepaid Bitcoin Laws & Bills

• North Carolina House Bill 289 – July 2016 • expands the state’s Money Transmitters Act to include Bitcoin • California Scraps Assembly Bill 1326 – August 2016

“The bill would authorize a person or entity conducting virtual

currency business with less than $1,000,000 in outstanding obligations and whose business model, as determined by the commissioner, represents low or no risk to consumers to register with a $500 license fee and, if approved, receive a provisional license to conduct virtual currency business.”

#ACIPrepaid California A.B. 1326, the Virtual Currency License

• Introduced Feb 2015 • 17 California coalition against: • technical inaccuracies in the bill, • due process concerns for license applications • non-refundable $5,000 fee • issues for small startups • drafted with only Bitcoin in mind • ill-suited for other virtual currencies and emerging technologies, such as smart contracts. • leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160A B1326

#ACIPrepaid What are the barriers to having this technology infused with prepaid cards from a compliance perspective?

#ACIPrepaid What are the unique issues associated with setting up a prepaid account that accesses funds in a bitcoin wallet?

#ACIPrepaid • Are prepaid cards a vehicle on which to load bitcoins? How does this work currently? • What are banks’ obligations in this regard? • How will the regulatory and compliance framework evolve to account for the marriage of and prepaid products?

#ACIPrepaid 16th National Forum on Prepaid Card Compliance

September 26 – 27, 2016

Impact of the Regulatory and Compliance Challenges Surrounding Cryptocurrency, Bitcoin, and Blockchain on the Prepaid Industry

J.H. Jennifer Lee Tim Rocho Partner Founder-CEO Dorsey & Whitney LLP (former Set for Life Enforcement Attorney in the CFPB’s Financial, LLC. Field Litigation Team)

Gideon Samid Robert Chief Technology Schwentker Officer Founding President BitMint, LLC Blockchain University

Tweeting about this conference? #ACIPrepaid