arrow-left<\/title><\/path><\/svg>\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\tBack to blogs<\/span>\n\t\t\t\t\t<\/span>\n\t\t\t\t\t<\/a>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t $\"compliant$ \t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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How to build a compliant European crypto and payments business?<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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How to build a compliant European crypto and payments business?<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\tStriga\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t<\/li>\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\tseptembre 26, 2022<\/time>\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t<\/li>\n\t\t\t\t
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\n\t\t\t\tTable of Contents\t\t\t<\/h2>\n\t\t\t\t\t\t\t

Our mission is to build a better payments network and the Lastbit project was utilizing Bitcoin and its Lightning Network for the task, specifically made for consumers. Nearing the end of the Lastbit apps\u2019 beta run, while winter was setting in on northern Europe, fresh off the heels of our latest fundraise and some semblance of product market fit with interest from large institutions in what we were building, solving the compliance puzzle in order to own the crypto stack \u2014 custody & liquidity \u2014 was an absolute must in order for us to progress, i.e.\u00a0actually build the thing that companies wanted<\/em>. Legacy financial service providers simply couldn\u2019t cut it to meet the needs of crypto companies and with crypto regulation fragmented and\u00a0shrouded in uncertainty around Europe<\/a>, to innovate, owning the crypto stack was essential.<\/p>

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\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t $\"striga-crypto-banking-platform\"$ \t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Various challenges with large upfront costs requirements<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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With a 10,000-foot view of what a compliance program looks like, when we made the decision to become a regulated company, we were serious about deploying resources and going above and beyond the expected regulatory requirements. Well aware that the legislation was set to change soon in Estonia \u2014\u00a0to further tighten the noose around the 400 or so remaining crypto companies<\/a>\u00a0\u2014 and with its\u00a0 startup-friendly laws<\/a>, unique location to serve the EEA, we weighed the pros and cons against every other EU jurisdiction and the UK before making a well-informed decision.<\/p>
The draft proposal of the new law at the time proposed various requirements that were important to consider in this decision, some of them being –<\/p>
Large upfront capital requirements, similar to Electronic Money Institutions (EMIs).<\/li>
Accountability in terms of \u201cconnection to Estonia\u201d \u2014 i.e. key management and HQ located in the country<\/li>
Strict onboarding, verification, and compliance requirements\u00a0(Some of which are practiced today and nearly impossible to comply with which is a dealbreaker for several business models)<\/em><\/li>
Tightened scrutiny around transactions, limits, monitoring, and sanctions checks<\/li>
Audit requirements, accounting requirements<\/li>
And several other noteworthy ones can be found here<\/a><\/li><\/ul>
\u00a0<\/p>
With an initial budget of what we figured was 6 months until the law changed, based on all available data points, we estimated a fair probability of success towards becoming a licensed entity and taking live the Striga platform in this timeframe. Little did we expect the level of scrutiny and uncertainty the company would be placed under, under the new law. The journey in its entirety lasted well over 12 months during which time we had numerous rounds of questioning from the regulator and two interviews to support the barrage of documentation explaining the company, its policies, rules, and business down to the last detail.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Striga\u2019s license journey to onboard companies European users<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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A \u201cdeath spell\u201d recipe for any early-stage venture-funded company is being dormant and unable to ship products for extended periods of time and with the economic recession setting in, and uncertainty around the licensing process, as a team of mostly \u201cthird-country nationals\u201d from various parts of the world who moved their entire lives to a new country, things were tough. But here\u2019s how we went about it –<\/p>
\u00a0<\/p>
As a small team, working together in person to iterate rapidly on the product, in the same time zone was a huge must-have. Qualifying for the startup program and jumping through immigration hoops, we planned the move for key team members. (The country\u2019s marketing department and its embassies around the world are\u00a0severely out of sync<\/strong>. This process is a\u00a0lot<\/strong>\u00a0harder than it is marketed to be)<\/li>
Began building and educating the entire team on the compliance framework, accountability, and the way our operations would change, directly impacting the fronts of product, business, and even marketing. Practically, this means translating tens of pages of legal text around the company\u2019s internal rules of procedures into code and manual labor with crystal clear awareness for everyone involved about what is at stake. Overly simplifying it \u2014 The final application was altogether over 200 pages of documentation explaining exactly what we do, how we do it, why we\u2019re compliant, and how we were to meet all the requirements of the law. Here is where there is the most room for error as preparing documentation does not equate to arbitrary templates and generic compliance policies. Being able to clearly answer and back up every single claim made on any single page with facts and answers which range from various risk-related matters to deep technical implementation matters was the end result \u2014 Which logically makes sense in this industry with every business being inherently organized differently.<\/li>
Deeply understand what the law is trying to achieve and begin building out a compliance team \u2014 A scarce resource in a highly competitive market in a small non-English speaking country.<\/li>
Solicited, negotiated, and built solutions with well-positioned custodians, exchanges, banking providers, and card issuers. Given the nature of the product \u2014 Either we would wait until the license was granted to build these partnerships we needed to build the core application logic (No banking institution will enable access to their product without being regulated for a business of our nature) or build on what we had, mimicking a live environment as best possible, to further our business efforts in enabling early adopters to start building, despite the FUD.\u00a0We did the latter and it\u2019s here<\/a>.<\/li><\/ol>
One of the biggest misconceptions we\u2019ve seen is in the meaning of what a \u201clicense\u201d entails. Especially most digital asset companies we\u2019ve come across tend to feature founders with a mix of business and technical skills and today, pan Europe with the current geopolitical situation and regulators cracking down (even going as far as retro-actively applying laws), obtaining a \u201clicense\u201d to operate in this industry is an arduous and risky endeavor, making it all the more important to build a team and product around the framework of legal requirements. With the\u00a0 MiCA legislation<\/span><\/a> set to apply pan-Europe in 2023, we\u2019re more than well positioned to fully comply and meet these requirements to continue shipping products. Effectively, for any company going through the process, one can expect to dedicate well over \u20ac1M to the task, implementing gnarly compliance-related infrastructure into your core codebase and around 12 months of fear, uncertainty, and doubt before you can even finalize your product and ship it.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Crypto Infrastructure as a Service<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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This is\u00a0exactly<\/strong>\u00a0why Striga is positioned as \u201cCrypto Infrastructure as Code<\/em>\u201d such that you can test, build and ship your product in as little as 3 weeks with\u00a0zero of the aforementioned<\/strong>\u00a0overhead. Despite the unanticipated length of the process, the setting in of an economic recession, and the sheer man hours required in negotiating and signing partnerships with at least numerous different vendors \u2014 this helped the team mature and deeply understand what it takes to build in this industry.<\/p>
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The outcome relatively speaks for itself \u2014\u00a0Striga\u2019s\u00a0platform<\/a>,\u00a0 documentation,<\/a>\u00a0and\u00a0 pricing<\/a>\u00a0are public and free for anyone to validate their product<\/strong>. As we\u2019re gearing up to take the first builders to live, drop us a note if you\u2019re interested!<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Striga Crypto-native Banking as a Service:<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Your path to building and launching financial products<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Join the <\/span>financial businesses<\/span> that use Striga’s cloud platform<\/span> to delight their customers and launch their own products without the complexities that come when dealing with<\/span> core banking solutions\u2019 <\/span>relationships, licensing, compliance and payments methods.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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