Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Archie Watt, Micky Swindale, Paul Davis, Peter Greenhill & Siân Jones: Is the Isle of Man Building a Haven for Bitcoin Businesses?

Episode Date: October 2, 2014

The Isle of Man has been an area of interest for many Bitcoin companies as of late. The local government of this small British Crown Dependency, located in the middle of the Irish Sea, wants to attract Bitcoin businesses by adopting light regulation as well as providing accessible banking relationships and infrastructure for companies dealing in crypto. This business-friendly approach has made the island an ideal place for tech, aerospace and e-gaming companies to establish, which has been a great benefit for the local economy in the last few decades. As an example, the leading online gaming site Poker Stars now employs some 200 people on the island. With the support of the Economic Development Department, the Isle of Man recently hosted Crypto Valley Summit to help promote their wiliness to work with Bitcoin companies. Siân Jones was at the event and captures this enthusiasm in three interviews, which we discuss on the show: Topics covered in this episode: Peter Greenhill, CEO of e-Gaming Development at Isle of Man Department of Economic Development Paul Davis, CEO of Counting House who specializes in payment solutions Archie Watt, Head of e-business and Micky Swindale, Head of Advisory at the global consultancy firm KPMG Episode links: Crypto Valley Summit Isle of Man Economic Development Department COINsult This episode is hosted by Brian Fabian Crain and Sébastien Couture. Show notes and listening options: epicenter.tv/043

Hello, welcome to Episode of Bitcoin, the show which talks about the technologies, projects, and startups driving decentralization and the global cryptocurrency revolution. My name is Sebastian Kutjou. I'm Brian Fabian Crane, and we have with us today, Sean Jones. Hey, Sean. Hi there, guys. Lovely to be back on the show. Thanks for coming on. And so today's show is what we brought Sean on because she just came back from Crypto Valley Summit in the Isle of Man. and we wanted to get her impression on the conference.

And also 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. So, Sean, 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 beyond. In fact, I stayed on the day later. and had some really interesting talks and discussions with people during and after. It is really refreshing to find a conference. They called it a summit, and it really was. This was a summit. This was that there was just a buzz and an interest, which I have not seen for a very long time at a crypto event.

So they did a fantastic job. Brilliant. 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 know that it's somehow attached to the UK and it's part of the Commonwealth. But what is the Isle of Man? Where is it? What goes on there?

Okay. Well, the Isle of Man is an island that sits pretty much equidistant between England and the island of Ireland, so kind of of the north-west of England, between it and Northern Ireland. So it's right there in the middle of the Irish Sea. It's a self-governing British Crown dependency. So it's entirely independent, but it has the same queen that we have in the UK. It's got the oldest parliament on the planet, older than any other parliament. And it's very proud of that tradition.

It's been doing really well with attracting new industry. Being an island and this island has around 86, 87,000 population now, it struggles to keep its population. There are more attractive things elsewhere. And so it needs to stimulate its economy. And 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 certainly has delivered on that judging by the summit.

The summit was organized partly by the government, so it was sort of sponsored by the Department of Economic Development. And it's one of the main commercial sponsors for the event was KPMG, one of the big four global advisory business. businesses. And 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. That's really unprecedented for sort of a conference to be spearheaded by the government of a nation. It's very interesting. And of course, it's a small island. They want to stimulate

new industries there and be sort of a place where people come to to start new types of business. And in fact, historically, they were one of the places where online gambling first started to flourish back in the early 2000s, I think. That's absolutely right. The e-gaming has been a huge success for the island. They recognized that as a lot of the rest of the world was switching off e-gaming, that 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, in fact, to begin with, they made a few mistakes,

and they used it to kind of provide a template for new e-business to come to the island. and I guess to a certain extent they've used what they've learned with e-gaming to attract crypto. But if we look at employment on the island, poker stars, which

in its early days set itself up on the island, man had just a handful of people and now employ several hundred. And so it's 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 played with this one company. And it's based on the Island accounts. I think eGaming accounts for something like about 14% of GDP now. So they've certainly had a track record in attracting new industries. In fact, I had a talk with Peter Greenhill, who is the director of e-business at the Department of Economic Development.

So that's part of the Island Man government. And they're the people spearheading the drive to attract crypto businesses to the Island Man. And he had some really interesting things to say about the place of the Island Man in crypto and indeed why they've got into it. So this is Sean Jones on my last day on the Islander, of Man, having attended Crypto Valley Summit, 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. Peter, this has been a very intensive two days. the starting lunchtime yesterday through to lunchtime today packed i have to say there was a tremendous buzz and a wonderful feeling probably more lively and energetic than any um 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 isle of man as an event? Absolutely. I mean, we were hoping for that sort of buzz. 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 mean, we've had a tremendous number of sea level executives arrive from all over the world 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 that could help them to set up their business in any way that they want to. The fusion of those two groups of people has been absolutely brilliant. You've experienced the buzz yourself. It's been very, very strong. Indeed.

Why is it that the Island Man has decided to engage with Crypto and welcome Crypto onto the island? What started that? We've got a bit of a history. of looking at innovations in industry and business that we could adopt here on the island that we could provide good service to. We need to grow our economy. We do that by growing jobs. But let's go back to e-gaming. We welcomed e-gaming companies to the island, but only under very strict regulation. So we set the bar high, we attracted the top end of the market, we made sure

that we protected players all the time by insisting that players' funds were segregated. What that did was create another buzz, a buzz of the gaming industry, not just the operators. We attracted the biggest and best software operators in the business to the Island Man to set their headquarters here, suppliers to that industry came as well. And the island itself grew, so the whole area of data centres, of telecommunications, communications, capabilities grew exponentially through that environment. We're looking to do the same thing, obviously, and with the services we already have here to put that into the digital world.

And of course now you've got 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 helping the people who've been here this week. And you're not just looking for people to hang there, brass plates here you want to bring people to the island very very yeah very definitely 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 e-gaming again just to use that that analogy um poker style started here with uh four people they're now well over 200 they've now been sold this year for 4.9 billion dollars a good growth story a great success story micro gaming the same thing arriving with a couple people growing to well over 200 staff here. And so what you're hoping for I guess is to have similar success with crypto businesses that maybe start quite small here, where the founders might settle here and then start to expand and hire local, create local jobs. Exactly. And those those could be local jobs of employing people who've come out of other areas. 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 worldwide are shrinking. They can then move across into jobs within the digital world but also it's attracting new talent as well. We can actually see for example the 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 They'll grow. They'll attract students from our university here that we're setting up to grow into a fascinating environment for the future and that will all happen here. And not a lot of people, I think, realize that the Isle of Man 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 do. We don't sort of perhaps fly our flag as high sometimes as we ought to.

But yeah, space sector, aircraft registry, shipping registry, very, very strong on the island. So, yeah, there's lots of areas that people can enjoy here. Well, after what I've experienced in the last two days, I would highly recommend any budding crypto innovator to check out the Isle of Man. Peter, thank you very much for hosting the whole event and for doing such a splendid job of it. from the other man government who participated have done a phenomenal job. Thank you for your time this afternoon sharing your thoughts with Epicenter Bitcoin. Thanks very much indeed. Thank you. So as you heard from Peter there, they have a real track record of attracting businesses. And these businesses include aerospace, as Peter mentioned, aviation and maritime registries.

These are sort of more traditional. Although, you know, in aerospace, they've I think something like about 40% of all the satellites circling the earth are owned by businesses and managed by businesses that are on the island. They manufacture parts. I think the landing gear of all Airbus aircraft are actually manufactured on the island. So there's real concrete, tangible business going on there. They've got, of course, the e-gaming that's been talked about, other areas of e-business, clean technology, biopharmaceuticals, biomed. These are real industries that they've attracted to the island

and that are successful now. Yeah, there's two things that I thought that were interesting. One is that you really get the impression that the Isle of Man is, is looking to create jobs there. They're not looking for a place where they're not, they don't want to create a place where people can just have brass plaque businesses as he, as he stated.

And the other thing that's interesting is when he talked about the gaming industry, maybe about 10 years ago, one thing that they worked to put in place of segregation of client funds, which is sort of something that we're often discussing in the Bitcoin space. So I think that they have, that there's a lot of experience that they would have gained from working with e-gaming that carries over to the Bitcoin space because we are talking about financial transactions and financial services and a lot of that knowledge perhaps that

that we have on the island can be carried over to the Bitcoin space. Absolutely. And I think they've got a track record of understanding that not every business is, if you like, modeled on traditional financial services. So as you say, they adapted an understanding of finance

and applied it to e-gaming, which is different. 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 New York, for example,

unlike Europe, which is sort of, much earlier stage, but we mustn't forget that the European Banking Authority came out with its opinion a few months ago, and there may well be consequences flowing from that report. They're saying this is not necessarily a traditional financial service, this is something new, and we will adapt to achieve the right aims to protect consumers, but not necessarily using the same tools and I think they're very wise in taking that approach and that's one of the reasons why the island is going to be a very crypto-friendly place. I think the other aspect of course is

that they understand banking and payments. They do have a long tradition in financial services and in payments. There are a number of payments, businesses, small banks, payment processes, one sort or another, Treasury management services on the island. And indeed, it was somebody from that background, a guy called Paul Davis from Countinghouse, who probably could be credited with starting to get the island man government interested in crypto and getting crypto businesses to come to the island. He was involved in the early days of e-gaming and providing payment services for e-gaming on the island and so he was very well placed to really to pick up on that theme and he got, I think I credited him with lighting the blue touch paper

that's now given rise to Crypta Valley Summit and the real businesses are already starting to set up on the island. And he recognized the importance of payments, and indeed, it is the availability of payment services at a time when banking is not open yet, not readily open yet anyway, 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 Yalaman, one can get bank accounts for Bitcoin businesses. which is something that hasn't been possible in the UK, at least for the most part. And then I know there were some news just around the conference saying that now this has been reversed. And then I was writing about it in the newsletter and you were telling me that actually the news stories had 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 Yellow Man?

Absolutely. One of the existing payment support businesses on the island's company called Capital Treasury, and they provide treasury management services, so they handle payments on behalf of companies all over the world, including those, of course, that are based on the island. And they have the infrastructure and the facilities to do that at scale. And they were offering or beginning to offer banking or payment services. They themselves are not a bank, but they were able to offer payment services to businesses and had started to open some accounts for crypto businesses.

And the day before Crypto Valley Summit, they had to announce that they had to close their crypto businesses or will in the course the next matter of a few days and weeks to do so because their bankers had withdrawn the facilities to provide banking, had basically threatened to close their accounts entirely if they didn't close their Bitcoin-related business. This was obviously a very unwelcome piece of news just on the eve of the summit. Now, Capital Treasury themselves is not a bank. It's not their fault. And it turns out, although it was reported that it was HSBC and Barclays, it actually appears not quite to have been the case. There was a different bank involved. And the history, the story behind it wasn't necessarily an automatic aversion as there has been elsewhere to crypto businesses, but rather as a result, as I understand, stand it of a fraud that had been perpetrated 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 this one fraud that it could happen again and so on and so forth. And it was that that triggered it. So it was really an unfortunate set of circumstances. Frankly, it could have happened in any sector. And it just so happened. But another sector, if it happened somewhere else, it probably wouldn't have been that now no more e-gaming businesses can't do business at all. Well, I had this problem. E-gaming had that problem early on.

I mean, it's taken a while. Certainly the Isle of Man, payments industry has been instrumental in providing payment services because it has a very high reputation, because they operate a proper anti-money laundering, regime on the island. They're not on anybody's blacklists. They're considered, in fact, they have very high ranking in terms of their regulatory framework. They've been able to provide, if you like, provide that level of confidence for the banking industry and being able to do banking in what are perceived to be high risk areas. Yeah, so what do you think the situation is going to look like in the future?

Do you think will the other banks be that step in? Well, absolutely. And Paul says something about that in his interview with me. So this is Sean Jones on a sunny day in the Isle of Man, somewhere between England and Ireland, a little island in the Irish Sea, that's hosting Crypto Valley Summit. One of the speakers today is going to be Paul Davis,

and he's very kindly given me a few minutes of his time. Paul, tell us a little about your involvement in the 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 Dan, who lives in France, had the idea of establishing a Bitcoin exchange on the Isle 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 Advisor 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 ignited the or lit the the blue touch paper of virtual currencies on this island because

your your your involvement up to then was in providing payment solutions for the e-gaming space, which is something else the island is well known for. Correct. My company, Countinghouse, 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 a bad 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, we shall see there was some news yesterday

that one of the island's treasury management businesses were told in no uncertain terms by their banking partners, their clearing partners, that they had to drop Bitcoin businesses, which they were starting to take on their books. That was obviously a piece of bad news. 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 upward. 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 for sure. Are you prepared to share some more detail with us? No. But there's new news. 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 to hear. We remain very, very positive about the future cryptocurrency on the island man.

So it's not just the government that's supporting it with a regulatory regime that's very light, that ensures that the reputation of the island and the island standing is maintained whilst at the same time being attractive to virtual currency businesses, but other businesses and players on the island who've taken steps to make it happen? Yeah, in so many fields of endeavour, 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 Island Man and I wear sunglasses every day. If that doesn't demonstrate optimism,

I don't know what does. I should explain for some of our listeners who don't know the Island 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 island 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 wonderful to hear.

It's also a joy to see a jury. jurisdiction that is nimble and astute and that it is actually encouraging these innovations and these challenging disruptive industries. Yes, 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 we're not about to be cowed or bow down to large entrenched interests that think we should become a backwater and grow potatoes and fish.

Unlike some other jurisdictions that may be not quite so nimble and fleet of foot and unfortunately losing some of their population 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 wonderful point to leave it. Paul, thank you very much indeed for sparing the time today. I'm going to listen to your panel session later on with huge interest.

It's been a pleasure. Thank you, Sean. So what came out of that was a panel session later that day where the CEO of Instabild, who were a global merchant. merchant services provider, the CEO Jason Field announced that his company is going to provide both merchant services and banking facilities to the crypto industry. It's unclear at the moment as to whether or not that will include access to the UK banking system to start with, but they are a very large merchant services provider that covers, and is used to handling so-called high-risk businesses.

And that was 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 Natacio, who are now putting themselves into the island man, setting up in the island man, have come to an arrangement with wall pay to provide payment services and therefore route into the banking system. And I think we will see more of these arrangements.

And we'll pay is a Nile Man-based payment services providers. So I think we're going to have a whole string of announcements like this over these next weeks and months. I think it's really happening there. And they've got the appetite for it and they can provide the confidence to the large banks eventually to be able to handle this kind of business. Now, one thing that he mentioned that kind of stuck with me

is it says 60 companies, 60 out companies are planning to set up in the island of man. Well, certainly so. I understand at least 15 have already set up shop on the island. We heard on the first day a keynote address from Steve Beauregard, who's CEO of GoCoyne,

they've already set up on the island. And we've heard on the first evening, we had an afternoon speech from Brock Pierce and his businesses too are setting up on the island. So, yeah, there's some big players coming to the island and they're queuing up. They're talking to the government and they're talking to businesses like Pauls

and other support industries that can help them get set up on the island, get them set up for regulation, get them set up with corporations and structure and tax and all the other good stuff. I should say the island is a very attractive place for tax as well. There's zero corporate tax, corporation tax. But I presume those companies, for the most part,

they have their operations elsewhere, right? They do the legal stuff, perhaps some employees there, but then they're not moving older people over there. Well, the island's certainly not interested, as Peter Greenhill said, in having businesses that simply hang a brass plaque on the wall. They want real businesses with real people creating real jobs. I think they understand that to start with the existing players

are probably going to work through representatives but 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 kind of name-only company on the island man and call themselves an island man business might find it not quite such a welcoming place, certainly not over these next months.

I think they are expecting people to at least have some staff based on the island. And I think there are signs of that already starting to happen. So you have a third interview. Could you introduce it? Of course. I guess everything we've talked about so far is very general about providing the right environment, supportive government and so on. But 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 maintaining the reputation of the island. And I talked to one of the commercial sponsors of the event, KPMG, one of the big four advisory, global advisory firms. I talked there to Archie Watt, who's head of e-business based on the island, and also Mickey Swindor, who's head of advisory on the island, both background in supporting e-gaming businesses, and both of them advocates for... Crypto on the Isle of Man.

This is Sean Jones on the second and final day of Crypto Valley Summit and the Island Man. A little bit misty today. We haven't got the glorious weather that I was promised, but we certainly enjoyed yesterday. And I'm sitting down with two key people from sponsors to Crypto Valley Summit. KPMG are one of the Big Four consultants. firms, they're the leading advisors to business. And I'm fortunate enough to have with me this morning, Archie Watt, who's head of e-business, and Mickey Swindale, who's head of advisory.

And I'm hoping you're going to tell us a little about why KPMG is supporting this new thing called crypto. Okay, well, if you want me to pick up that, first of all, Shan, and why do we want to get involved with this crypto? Because it's important for the island. It's a key feature of the industry going forward. 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 life on the island and elsewhere. I think it's fair to say we have a track record in that area because of the work that we've done with the gaming sector, which has been a very important developing sector.

in the Isle of Man over the past 10 years, really. And one of the reasons that Archie joined us as our head of new business was because he had so much experience on the gaming side. And we've really seen the benefits of being an early, passionate advocate for that sector. And I hope that we can do the same when it comes to cryptocurrencies. Why the Isle of Man? 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 business gets everything it wants from government, but it does 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 territory. And, you know, we sign up to all the best practices. We've been reviewed by numerous EU and international bodies on transparency and tax and all the rest of it and passed far more easily than a lot of other territories. Mickey, would you say that situation?

Yeah, and I think it was interesting listening to the regulation panel yesterday, which of course you were on, because it actually changed my view slightly on the regulation question because it's clear that one of the big attractions of the Isle of Man has been that there is a strong, well-recognised regulator here and that the companies, the operators in this sector are hungry for regulation. because those, the good actors within the sector, want to be able to show that kite mark and say,

look, I can, I'm checked, people, people can attest to this. And so it was interesting to hear John Spellman sort of say, be careful what you wish for, because, you know, the register initially is going to be a very powerful force, I guess, for AML and fit and proper legislation and customer protection. And I suppose I had thought that, introducing a full prudential regime quickly after that would be the right thing. It's interesting 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 do that. So I don't know what your thoughts are on that. And I still, having spent sort of 15 years in gaming, you know, as Warwick Barrett Bartlett said yesterday, you know, the gaming sector was crying out for regulation and tax. You know, they've got it and, you know, they're being taxed out. existence. I think that Warwick's words were very, very

true. So, like Mickey, I thought that we should be going down the regulation route, but we need to make sure that appropriate and fair amounts of consumer protection, KYC, anti-money laundering and, you know,

protect the proceeds of crime legislation is all of those things are complied with by the good actors here on Ireland. So, I mean, I think that could be about the right sort of level. I mean, it's got a balance, isn't it? I mean, it's, we don't want to kill a thriving sector. At the same time, I want to make sure that the bad actors are kept out.

Yeah. Well, I mean, the Isle of Man has taken a very bold step and venturous step by saying that it, at this stage, isn't planning to regulate cryptocurrency businesses, but instead requires them to comply with what are broadly the anti-money laundering laws that either already exist here on the island or are being amended to bring them in line, I suppose, with most of the other European nations, but essentially to bring AML systems into play. And so long as that is done, and the...

businesses are properly run, well-managed 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, to crypto businesses, that is. Yeah, but it's interesting, there are more people coming to the party, aren't there? You know, 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 taking a...

early action, making a bold announcement, as you say, back in June, setting up the FSC register and expanding the designated business bill to make sure that it does include companies from this sector. And I hope that stroke of genius stands them in good stead. We shall see, as everyone else gathers around the feast, I guess. I think some may try and copy the model that's been set here. Do you feel that that's likely, maybe some of the other smaller islands? Almost certainly. It's, if something is good, it will be copied. And I think that from what you're hearing around here, the delegates here seem to think that

what the island has announced and how they're implementing it is good. And the island has a record of attracting new business, not necessarily financial services, businesses, but other forms. I think the island man is big in space. And the island man is big in space. Island Man is big in biofarmor, to name but two. And so they're not just interested in financial services. So this is the right place for them to, or the right time,

for them to use the same adventurous model for crypto businesses. I agree. I think for any of the small business islands, that diversification. is really important because the world economy changes. As we've seen, financial services have declined rapidly as a sector. If the Isle of Man hadn't had these other sectors which were growing and thriving and innovating and changing, it would have struggled. I mean, John Schimmon this morning set out some fabulous statistics, didn't he,

about the success of the Isle of Man. And I firmly believe that without that diverse underpinning of industries, that wouldn't have happened. So will KPMG be setting up a crypto-offer? here in Douglas? Well, the office is already crypto aware, so we are, so we're already bought into the concept of crypto. Well, I'd like to thank you both for spending time with me this morning. I can hear in the background that people are going back in to listen to, I think, Bobby Lee probably. So I think we should probably slip back in at the back now, but thank you both very much for your time today.

Thank you. So you heard Archie and Mickey talk there about some of the practical things that are being done on the island in terms of regulation. It's not regulation of crypto specifically, although I think in time we might well see some more specific crypto legislation come in. But I think that's some time off. I think they'll wait and see and they will take their time to do that if they do it, at a practical level, they're in the process of amending their proceeds of Crime Act in such a way that it will bring crypto businesses into the framework of anti-money laundering and counter-terrorist financing regimes. It'll simply be another industry that has to comply with those rules.

And it's also in the throes of bringing in a new bill, expected to around the end of this year, maybe the beginning of next year, for the mandatory registration or statutory registration of certain types of businesses so that there is some sort of supervision of their anti-money laundering regime. And so this is effectively just to create a mandatory registration requirement to bolster the proceeds of Crime Act provisions. and those two things together will be the extent of regulation of crypto businesses and will give a very, provide a very light touch environment for crypto businesses to start

and to thrive, I believe. I love how they sort of have a balanced approach where they want to keep this sector thriving while trying to keep the bad actors out with some light AML KYC kind of layers on top of the regulation zone. Yes. I wouldn't say that the AML KYC rules are any lighter than anywhere else. They are world class and they're recognized for being so.

But to the extent that there'll be, it'll be light regulation in the context of the whole spectrum of crypto business. that will only be that aspect that will be regulated. And that makes it certainly a light-touch approach. But they're not a pushover. I mean, they do run their AML operations to global standards, and they're known for it. That's how they maintain their reputation.

I think it's also worth mentioning that the Island Man is in a rather curious situation. physically in Europe, in the sense that it's sitting there between two of the outlying islands, the United Kingdom, the Great Britain and Ireland. But it's not part of the European Union. So it sits outside of all the EU directives, outside of all this sort of bureaucracy that flows out of Brussels, with one exception. Under the arrangements that it has, as with the United Kingdom, the customs arrangements it has. It applies a VAT system, a value-added tax system, that parallels the system in the United Kingdom, which is part of the European Union.

So 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, as I mentioned earlier, there's no corporation tax unless you're a bank. The other taxation is very favorable. But VAT rules are not governed by Brussels in the UK. Yeah, effectively, the rules for VAT are set in Brussels. Well, they're set in a VAT directive.

So they flow from the Parliament and the Council of Europe through the Commission. And as 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, there's a there are variations throughout Europe and unfortunately from the island man's perspective whatever or however the UK interprets VAT they have to interpret it the same way it helps them because they they share their VAT with

the United Kingdom and that helps with their fiscal stability but it does mean that there's VAT. So at the moment, the UK has a very favourable approach to VAT on crypto, and therefore there's a very favourable VAT approach on the Isleman. If that changes in time, perhaps as a result of this impending decision by the European Court of Justice, which may come out in a year or two's time, 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 European Union, I should say, that will have an effect on the UK and that will have to be mirrored on the Isle of Man. But right now, it's outside of Europe and there's a very good VAT and general tax regime.

Anyone who wants to find out more about business and life on the Isle of Man will find a website that's run by their business development, their economic development, department and that's at where you can.com. Pretty catchy name. Whereyou can.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.

I'm so, you can tell, I'm so enthusiastic about what's happening there on the island. I think the facilities are there for any business to set up. As some of the listeners will know, I specialize in regular. regulatory compliance and 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 offices elsewhere in Europe. So yeah, I'm setting up in Douglas, which is the main centre on the island and I will be there increasingly more often over these next weeks and months. How do you get there?

Is it like you take a boat or plane? both. I don't recommend the boat in winter. The seas in the Irish seas, Ars see can be very choppy and it's not everybody's cup of tea but there's some fast ferry services from the west, northwest part of England, Liverpool and Haysham I believe, but you can fly. All major British Airlines fly there, British Airways fly is there from London City and Gapwick, I believe, and other airlines flying from other major centres in Great Britain. And of course, through London, we can get great connections from other parts of the world. Cool.

Well, good luck with setting up there. And, of course, that also means that to all those who are running a big client business and they're wondering what the best options are in terms of where to set up, they should get in touch with Sean and perhaps she can help you explore the option of setting up on the Isle of Man. Well, certainly, and shameful plug, but come to coinsult.e.u

And you'll be able to reach out to me and I'll be more than happy to give advice. Cool. Well, thanks so much for listening and thanks for especially to you, Sean, for producing this content. It's really been great to listen to the interviews you've done. here and also at over there and inside Bitcoin's.

Well, thank you once again for having me on the show. I so thoroughly enjoy working with you guys. Yeah, well, so do we. So thanks so much. And of course, thanks to us to our listeners for listening once again to one of our episodes. So if you want to, you can follow us on Twitter at episode of BTC. You can also leave us for a review on iTunes, which is very much appreciated. It helps new people find the show.

and you can subscribe your newsletter at Epiccent of Bitcoin.com slash newsletter. And of course, tips. You know, we do appreciate those as well. So you can show us your appreciation on episodeendipicon.com slash tips. Thanks so much and we'll be back next week.