We hereby present two projects:
The project of a multi-functional Internet kiosk that enables one to perform monetary intermediation services;
The offer of a broker of derivatives of financial instruments registered in Israel, to which the kiosk described above in point I) may render monetary intermediation services.
The proposed mode of obtaining the documents of state administration bodies in order to ensure legal functioning of the product described in point I), rendering monetary intermediation services in a given country to the broker referred to in point II). XXX
I) Multi-functional Internet kiosk
The basis of the functioning of the kiosk is the performance of wire transfers to any IBAN accounts entered by the user, restricted to amounts which, according to local provisions preventing money laundering, may be transferred without verifying the sender’s details. The second feature of the kiosk is the ability to install external providers’ plug-ins on it. Thanks to them, the editing of the payment details is easier than through IBAN. This type of payments may be posted in real time, while we settle such payment with its addressee collectively once every settlement period.
The advantages of this service may be presented based on the example of mobile network operators. Owing to our service, the mobile network operator’s clients may pay for mobile phone services by entering their phone numbers into the plug-in, inserting the funds into the device and clicking the “confirm” button. The providers of other services, namely electricity, gas and other utilities providers, banks, insurance companies, Internet stores, mobile applications providers, and many other, may collaborate with us upon the same principle.
An additional strength of our devices, as a result of installing units issuing banknotes or coins in those devices, is the ability to transfer funds in the other direction, that is from an institution collaborating with us to the user standing in front of the device. The authorization of the client for the purpose of a given payment may take place in the manner selected by such plug-in provider. In the case of, for example, the cross-border wire transfer providers, it may be a set of codes which a person paying in the funds received, whilst in the case of collaboration with the broker of derivatives of financial instruments or a bank - it may be a pair login-password or any other form of authorization.
The kiosks also possess the paid access to the Internet function.
The user approaching the kiosk sees the following screen:
The funds paid in by the client are visible at the very bottom of the screen. Along with the cash-in payment, the amount displayed increases by the amount paid in.
The bottom part of the screen with the amount entered is visible the entire time the user is using the device, regardless of what feature the user is using (excluding the CASI pre-paid phone payments, which subject is touched upon below). In the event that the user is already in the programme handling a feature selected by him, then along with putting subsequent face values into the machine, the amount increases there as well.
In the event that the user chooses not to enter any of the features handled by us, then, a “withdraw all” button appears on the right side of the screen, which enables the user to cash out all the money deposited by him without choosing to use the kiosk.
Upon pressing the “Money Transfers” button, the user is directed to the main feature of the kiosk, namely money transfers to a selected bank account. Above the button, there are four other buttons representing additional features offered by our machine. In the event that we establish cooperation with an external institution with respect to payment handling, the plug-in of such institution will be added to those four. We are subject to no limitations with respect to the number of such plug-ins. In the event of a larger number of them in the future (which we hope), the so-called “scrollbar” will appear, and the user will be able to browse freely all of them, by moving them with the said scrollbar.
1) “Money Transfers”
After clicking the “Money Transfers” button, the following screen will appear before the user:
In the event of correct completion of all forms, the screen will look in the following way:
In the event of confirmation by means of the “Transfer Money” button, a prompt demanding confirmation will appear:
Next, after the confirmation, subsequent messages are displayed: and:
Our system possesses protection against incorrect IBAN number entry. After the transaction, a receipt is printed, based on which the user may make a complaint. Such complaint may be made, for example, in the event that the IBAN number entered by the user is ascribed with completely different bank account owner’s details than those entered by the user. It is also possible that the account number entered by the user used to exist once, but it no longer does, and our system also fails to verify such state of affairs correctly. We will learn this fact only upon the rejection of our money transfer by a bank collaborating with us. The reason for our rejecting the transfer may be justified suspicions in connection with the internal money laundering prevention procedure applied by us.
2) Internet kiosk
While entering the Internet kiosk feature, the user first sees a panel with a price list as shown below:
After confirmation using the “START” button, a browser window appears: with a start site set to be google.com. Clicking the “FINISH” button will result in exiting the browser feature completely.
3) "CSANI money transfers" deposits/withdrawals
After clicking the “CSANI money transfers” feature, the user sees the following view:
As CSANI offers two types of accounts, namely an account identified by a MAC computer address and an account identified by a login and password, there are two areas clearly separated by means of blue frames on the panel – one concerning deposits/withdrawals of accounts identified by a MAC computer address, and the other related to the deposits and withdrawals of accounts identified by a login and password.
After clicking one of the “Cash Deposit” buttons, the whole amount of money deposited into the machine is transferred to the CSANI account with a payment title identical with the MAC computer address or login if the authorization is carried via login or password. Pressing the “Deposit All” button will cause every face value put into the machine to be automatically transferred to the account of the “CSANI money transfers” service offered by CSANI with transfer details being the same as the authorization selected by the user.
After pressing one of those buttons, the CSANI deposits/withdrawals panel looks as follows:and in the event that there are funds on the currently credited account, there is also a “Withdraw” button at the bottom:
Transferring money to CSANI may be finished by pressing the “Stop Transfer to CSANI” button, or by clicking one of the “Withdraw Amount” or “Withdraw All” buttons.
The red button “Withdraw...” displays the amount constituting the balance of the currently credited account. The said balance is downloaded from the CSANI server in real time, which constitutes a part of the deposits/withdrawals plug-in supplied by csani.com
At any moment, the user may use, free of charge, the contents of the www CSANI website by clicking the “Show WWW” button. It is necessary to withdraw the money to a bank account or to change the password in the “CSANI money transfers” system. By clicking the “Show WWW” button, one may open the browser window similar to the one in the “Internet kiosk” feature described in the following point, however, the user may not go to www websites beyond the csani.com domain. The main site of the browser which only serves to view www sites and belongs to CSANI is the “manage account” tab.
Apart from cross-border transfers forming part of “money transfers”, CSANI’s flagship product, the institution also possesses licenses to sell derivatives of financial instruments. On the www site belonging to CSANI, there are client java platforms that serve to place orders for financial instruments offered by CSANI.
Despite the fact that a java platform is installed in our machine (the kiosk application also uses components written in this language), we do not recommend logging from the www CSANI level onto the transaction platform to our users (CSANi gives a possibility to start such a platform from the www level). If the kiosk operators notice such frequent occupying of the machine’s time, we are willing to withdraw the function of free www use belonging to CSANI
The “CSANI” project www site in our browser looks in the following way:
The “Close Firefox” button causes the browser to close, whereas the “Return” button results in the exit from the “CSANI money transfers” option.
The devices are prepared for installing different types of plug-ins in them in order to handle transfers to third institutions. There is also a possibility to put in advertisements of institutions which will order such advertisements in those places.
A shortened business plan of the undertaking for the needs of state administration bodies may be found here: http://mtkiosk.com/BiznesPlan_EN.pdf upon request we make a detailed, over 40 pages’ long business plan available, which includes all future proceeds and satisfies other requirements of the state administration bodies.
A shortened procedure of preventing money laundering and terrorism financing proposed by us may be found here: http://mtkiosk.com/anti_money_laudering_EN.pdf its detailed version is available as well, and it complies with the requirements of the directive of the European Union on preventing money laundering.
II) Csani.com - a provider of cross-border money transfers and a broker of financial instrument derivatives.
Description of the CSANI transaction platform:
CSANI.com is a broker of derivative instruments of the currency market registered in Israel with the right to offer such instruments there. All citizens of the countries where investing on foreign markets is not forbidden may benefit from the broker’s offer. The said ban does not apply to the entire European Union, however, it is in force in the USA.
CSANI.com offers financial options based on a base instrument that is a currency index (hereinafter referred to as the “USD index”) defined by CSANI. The “USD index” is a weighted average of several currency pairs quoted to the dollar, which pairs can be found on the following website: http://csani.com/USDindex_pairs.txt. The “USD index” is supposed to express the general trend of the dollar in relation to the other world economies represented by other currencies. The weights used with respect to the currencies to build the value are known to the CSANI.com investment platform users at any time and are available on the following website: http://csani.com:7742/USDindex_coefficients.txt. The same way the New York Stock Exchange (NYSE) publishes ratios next to its indexes, the same way CSANI.com publishes them on its website.
The options offered by CSANI have a European life span, that is, they cannot be closed before their exercise time. The payment depends on the structure of an option. Payment is only a function of the “USD index” exchange rate upon the exercise of an option, and the shape of this function is perfectly known to the investors buying such option, depending on the future “USD index” rate. The options are put up there for sale directly by csani.com, and there is no possibility of selling them before the option exercise time, and there is no offer table conducted for them, either. The options are offered to the platform users in the same way banks offer swaps, IRS contracts, options and forward contracts for currencies to their business clients, that is, without the stock exchange’s participation.
Each platform user possesses her/his own investment account, which s/he may credit or withdraw money from. The funds the client has deposited on her/his investment account, maintained by CSANI, may be used to purchase the above-mentioned financial instruments at any time. The payment from those instruments may also be paid to such investor’s investment account.
The “USD index” constitutes a weighed average of several dozen more important currencies in the world to the dollar. The ratios with respect to those constituent exchange rates are selected in such a way that any percentage change of a given currency always has the same impact on the USD index, regardless of the currency. The ratios are recounted every day at midnight, and each user may familiarize her/himself with them at any time. Thus constructed “USD index” constitutes an instrument that expressly presents the dollar’s tendency in relation to other currencies, and, what is more, as a result of over thirty constituent currencies, it is an instrument characterized by very considerable variability. The exchange rate of each currency is set by the broker at any time based on the information platform of the international currency market Routers Eikon (the very same as the one used by banks). Furthermore, the broker offers a EUR/USD quoting instrument as a base instrument (also created as the average of the best purchase price of EUR/USD and the best sale price of EUR/USD Reuters Eikon), however, it enjoys little popularity.
Based on thus constructed base instrument “USD index” or EUR/USD, the broker offers the following exotic financial options:
1) “BET + BET -” options. The user comes into possession of such an option in exchange for an amount declared by her/himself, and for an option exercise time selected, having times from 10 minutes up to ... several seconds at her/his disposal. The option has a European lifespan, that is, it cannot be closed before the time set, and it always closes itself upon its performance. The structure of the payment of those options is the following. When coming into possession of the option CALL (when we think that the base instrument will gain in worth), we will get as large a payment upon its exercise as the value of the base instrument has increased, and in the case of the option PUT - we will get the more the instrument value fell. The structure of the payment both for the option CALL and PUT is not a continuous function of the base instrument exchange rate change, but a discrete one. Each of the options offered by the broker defines its exercise levels, upon the excess of which it gives specific payments. Before coming into possession of the options, the user chooses how many payment levels his option is supposed to have. S/he may choose between only one (an option which is popularly referred to as a “binary” one) or even 22 different levels, at which each option gives a different payment. The transaction platform for such options is a basic platform supplied by the broker, which the user may turn on at home from the www site.
The screenshot of the platform can be seen below.
The graph presented on the platform is a graph of the base instrument and it changes in real time. Upon clicking one of the “BET +” or “BET -”, the user comes into possession of the option CALL or the option PUT accordingly, and the entire life cycle of the option is illustrated on the graph by means of two vertical lines moving along with it to the left, which lines indicate the option duration time. When the graph comes to the right broken line, and thus the option completion moment takes place, the user’s account will be credited with the cashout that the option generated. All possible, subsequent cashouts are presented by vertical arrows on the right side. If the user came into possession of the option CALL, then green arrows are taken into account, and if s/he took the option PUT - the red ones. If the graph exceeds the last arrow, then, of course, the cashout will be the highest. If it fails to exceed any, then the cashout will amount to zero. On each arrow, vertically, exercise levels are displayed. Once they are reached, the instrument generates cashouts specified to the left of the arrows. In the event that the user is not currently in the possession of any option, the exercise levels change in real time along with the graph. Upon the purchase of an option, they are at the same level, at which they were found upon clicking BET+ or BET - until the end of its duration time. Depending on the rate per option set by the user, the potential cashouts are accordingly higher - in proportion to the rate.
Below is presented the view of the broker’s platform window upon the exercise of the option PUT for the rate of EUR 0.50 per option, 10 seconds of its duration time, and 3 possible cashouts. In this case, the option cashout amounts to EUR 10, and such amount will be added to the user’s investment account.In the event that the number of possible cashouts the user selects is higher than 7, then, instead of arrows, level highlights appear on the right side (the arrows simply do not fit in width) with the same data as on the arrows (amount of the cashout, level of the cashout) and looks in the following way:
In addition, the broker offers the same transaction platform as the one above, the only difference being that it additionally puts a panel with the so-called “drums” on the left side, where, in addition, it visualizes to the user the lifespan of the instrument and the wins in the following manner:
The moment the user comes into possession of the option, the drums start to rotate. The moment the cashout of the option is set, the drums stop rotating and align in a combination that results in the same cashout as the cashout just set by the option.
For every game, it is determined what combinations of icons on the drums result in particular cashouts. If, for example, three plums aligned horizontally result in the payment of EUR 2 when the rate is EUR 1, then, if our option - the rate being the same - gives a cash out of EUR 2 upon its exercise, then the moment the exercise took place and the cashout was set at the level of EUR 2 precisely, then after that moment the drums will stop resulting in the combination of those three plums or other combination giving such cashout.
Each drum consists of a set number of icons put one after the other and moving in circles. Every stop of the drums results in displaying strictly determined positions of that list by each of the drum. For every possible cashout that an option may result in, the broker keeps a list of combination of the drums that results in such a cashout precisely. The moment the option cashout is set, the broker takes another cobination from the list of such drum cashouts resulting in that cashout, and it stops the drums in precisely this combination. In the event that the list of winning combinations for a given option cashout runs short, the broker goes back to the beginning of it by taking another combination. Both the lists of combinations of cashouts set, and the lists of subsequent icons on particular drums are available to the users.
To sum up, the moment the user comes into possession of options, the drums on the side of the screen start to rotate. The moment the option cashout is fixed, an arrow responsible for the cashout flashes, and then the drums stop, resulting in such a combination that gives such a cashout as the option. The combination that becomes set is not taken from the list of combinations resulting in such an outcome at random, but is is taken from the list which every user may familiarize her/himself with, although, all in all, it does not matter anyway, as the same cashout amount is fixed by the financial instrument. It matters only with respect to the list of combinations what icons will be displayed on the drums during the visualization of the option cashout by them.
The justifiability of the broker of derivative instruments introducing such a visualization of the cashout of the instruments offered by it is that looking at the very graphs seemed boring, and in order to make the course of the option’s duration more interesting, the broker chose to visualize the win in such a way. The second, equally important, reason for introducing the drum visualization by the broker was targeting current Internet casino clients, and interesting them in more sophisticated instruments than those of chance. Watching the course of the graph, the user tries to predict its shape in the future, using technical analysis theories that are unique for every user, and thus, makes a decision to purchase options that are defined higher for the purpose of speculation. The target client of the broker becomes aware of the win from a currency option more if five sevens start flashing than if the highest of the arrows flashes only three times. Besides, every person becomes more excited looking at “rotating drums” than while looking at a dry graph.
2) “BET +-” options. They were created with investors looking for ultra-short base instrument variability options in mind. "BET +-" is a combination of the options "BET + BET -" CALL and "BET + BET -" PUT described above. Upon coming into possession of the option “BET+-”, the user in reality comes into possession of one option “BET+ BET-” CALL for half of the rate set by her/himself and one option “BET+ BET-” PUT, also for half a rate.
For the purpose of acquiring such type of options, the broker has prepared the following platform:
Instead of two “BET +” and “BET-” buttons, there is one “BET” button which, in fact, works like clicking “BET +” and “BET-” simultaneously. The essence of those options is their independence of the exchange rate risk of the security, and dependence on its variability. It does not matter if the base instrument gains in value or loses it. It is important that it changes its value, and then the user has a great chance for non-zero option cashout.
In connection with those options, the broker has prepared a transaction platform with a drum visualization for those users who respond to it better. The platform offers only one type of option and visualizes the cashout from such an option with the help of the view of the drums planted in almost the entire programme window. The type of option that is taken into account in connection with the functioning of this platform is the option “USD index” “BET +-” with 22 possible cashouts, and option duration time of 1 second. A graph appears at the top, whereas on the right side of the drums there is an approximation of the option’s lifespan, on which it can be clearly seen which of the possible cashouts the option has reached. Such approximation completes itself the moment the option’s cashout is set, and is displayed there for several seconds.
The contents of the window of such platform:
The principle of visualizing the wins by means of a combination of drums is identical with the options “BET +” and “BET -.” The “SPIN” button serves the role of the “BET” button of a traditional “BET +-” platform, whereas “AUTO SPIN” causes the platform to behave in such a way as if it simulated clicking the “SPIN” button all the time (this causes conclusion of the same option over and over again).
Apart from offering financial instruments (the name of the platform: “CSANI street forex”), the csani.com platform provider, Batumi International Service from Israel, also offers the service of cross-border money transfers called “CSANI money transfers”, and it is this service that, according to the provider of those services, is the flagship product of this enterprise. It was probably introduced to enable the citizens from the countries with a ban on investing outside their borders to pay the funds onto the platform, and it is the only to that account that one may pay its funds, both crediting the account of “Batumi International Service” to the bank account, and with the use of MTKiosk devices or other kiosk provider. The moment the user of a given account as part of the csani.com platform starts investment platforms, a subaccount is automatically generated whose function is to handle the investment account, and owing to the fact that the very “CSANI money transfers” account does not serve entirely to handle those instruments, but, as a rule, to handle cross-border transfers, then in the event of crediting the “CSANI money transfers” account by MTKiosks, we do not have to do with operations of deposits and withdrawals directly to the money account that serves to handle the investment account. Being the providers of the kiosks enabling the transfer of funds to and from “CSANI money transfers”, we even allow ourselves to place “CSANI money transfers” advertisements on the casings of the devices without any fear of getting involved in regulated activity that offering financial instruments or their advertising is in the majority of countries.
Batumi International Service allows for several types of engines of the investment platforms supplied by it:
a) a platform with quoting the base instrument as a resultant of quoting the inter-bank market and the largest forex brokers. In addition, upon the formation of such a rate the internal market of the broker’s clients plays a certain role, which the broker calls an “emulated table offer”, and the presence of that last factor causes a certain variability of the base instrument event at the weekend. The csani.com platform operates on the basis of such algorithm of the base instrument quoting. As a result of a large number of clients in Poland itself, for instance, (about 4000 items of MtKiosk machines, which realize monetary intermediation to “CSANI money transfers”) the variability of the base instrument is currently very promising. The framework of creating an algorithm of creating the base instrument rate are described in Application No. 2 attached. b) a platform with quoting the base instrument as a resultant of quoting the inter-bank market and the largest forex brokers without taking into account orders on the internal broker’s market. Rather small variability of known platforms of known forex brokers at the weekend results in a complete inability to place orders at the broker’s with the application of this engine. The algorithm of building an exchange rate of the base instrument is, in this case, the same as in the case of a), however, the broker does not modify it based on its future predictions resulting from its involvement in the options put thereby. c) a platform of an option for a course being a weather index wd-index published by a weather data provider ”Deep Blue Investment” registered in the Czech Republic. The weather data provider possesses 10 weather stations in the East Central Europe. For each of those stations, it publishes its GPS data and accurate temperature, atmospheric pressure and relative humidity readings in real time. For all those three readings, there are average indications from all the ten stations in real time, and the instrument called the wd-index being a difference of the current average relative humidity from all the ten stations, and such determined average of the average humidity from the last 10 minutes. Thus constructed base instrument’s advantage is that it possesses a large variability for 24 hours, seven days a week, and the majority of the countries regulating the derivative financial instruments market treats weather changes as one of the possible base instruments for creating derivative financial instruments based on them (next to such other instruments as stocks, bonds, interest rates, currency exchange rates). Such approach on the part of the legislator, is included, inter alia, in the MIFID directive, most definitely has its source in the instruments related to climatic changes quoted on the Chicago Mercantile Exchange (CME) (for example options for the number of sunny days in May) that are popular among farmers who protect themselves against good or bad harvest in this way, and power stations which protect themselves against the decrease in the demand for electrical energy. The website of the weather data provider in real time: http://www.wd-index.com/ d) a platform of options for the instrument called “USD-index + wd-index.” It is a sum of the instrument described here in point b) and the one described in point c) multiplied by a certain, small number, for example, 0.0001. As a result of such constructed exchange rate of the base instrument during a week the concluded options offer cash outs only contingent upon the currency quotings of the largest forex brokers, whereas during the weekend their cash out is only contingent upon weather conditions. Such a dependency of the cash out solely on the events on the currency market during the week, and on the climatic changes at the weekend is possible owing to the fact that the wd-index is added to the base instrument, and multiplied by the fixed set value that is sufficiently low (for example, 0.0001). e) the same engine as in point a) or b) including the quoting currencies Bitcoin/USD in the basket taken as an arithmetic mean of the price of the currently concluded transaction BTC/USD on the platforms: Bitstamp.net, Mtgox.com, btce.com, Bitfinex.com. We suggest using the algorithm presented in point b), as owing to the transactions concluded on a regular basis on the bitcoin market 24h seven days a week, the variability at the weekend is sufficient from the point of view of the options offered. f) in addition, for each of the above-mentioned base instruments we offer platforms with jackpot and without it. In the case of platforms offered by Batumi Service, jackpots are options for options described in greater detail in the enclosed applications for interpretations of the provisions. The broker offers two kinds of jackpots: up to three (small, medium, and big) increasing globally, and up to six increasing ones from lost “rates” as part of only one investment account. Due to different interpretations of the state administration bodies with respect to qualifying an instrument called an options for options as a financial instrument, the broker may turn off jackpot for clients who log in from a specified jurisdiction area.
For all the platforms of the above type, the broker possesses high class servers ready to start particular versions implemented by "Batumi International Service". A series of domains are prepared for the implementation of such projects as: http://www.persicofinancials.com/ The broker declares a possibility to start a platform of sports betting based on one of the following engines. The idea of such bets resulted from the offer of one of the bookmakers acting in the territory of Great Britain: http://www.finspreads.com/ which bet keeper’s offer is exactly the same as the traditionally functioning forex brokers, nonetheless it is treated as gambling from the taxation side. One of the domains prepared by the broker for the purpose of work within such legal framework is: http://www.easternbetting.com where the contents of the www site may by adjusted by the broker to the terminology used in the mutual bets industry.
Please consider that the structure of an instrument that forms an option is generally identical with the structure of a mutual bet in such a way that in exchange for a specified rate one acquires the possibility of cashout in the event that specified circumstances arise in the future. The structure of the legislation all over the world is such that if it is possible to create financial instruments and mutual bets (most frequently mutual bets can be made for any kind of event) based on a base instrument given (results of sports competitions, results of animal competitions, currency exchange rates, climatic changes), then whether we have to do with a mutual bet or a financial instrument depends on the way the seller of the products presents it. Such a situation occurs in the majority of the European Union countries with reference to currencies and weather phenomena. In such case we have the possibility to both render monetary intermediation services to the broker in Israel, and establish a bookmaker in the indicated place in the world.
The broker has also the possibility to establish platforms with visualizations that do not contain elements associated with gambling. As a result, all kinds of “cherries”, “sevens” are replaced by symbols that are less associated with those that the gambling industry is known for. There is also a possibility to programme all the visualizations in such a way that the icons rotating in the “drums” rotate around their own axis as is the case with the visualization called “Magic”, which the CSANI broker already possesses in its offer of visualizations of lifespan and cash out of the financial instruments offered thereby.
There is also a possibility to construct a structure enabling operation without a license for monetary intermediation. The mechanism that enables that uses the satisfaction of a service by a third person and allows for the cooperation with the broker without the necessity to supervise the regulators of the payment services market. It requires, however, the obtainment of advantageous legal opinions in every country, in which it would be applied. In case of interest in this sort of cooperation, the broker undertakes to provide detailed information.
Apart from the MTKiosk operating in Poland, we are in the process of obtaining a license for monetary intermediation in Bulgaria, and in two other European Union countries. In case of interest in the project, we are able to finance and manage companies obtaining licenses for monetary intermediation in any jurisdiction. Of course, both the financing and managing of the companies may be on the side of our counter party. We are flexible as to the shape of the cooperation and division of duties.
III) Our proposals as to the manner of obtaining interpretations to ensure the conformity of the kiosks with the local provisions.
The below described applications concern a model, in which a device renders monetary intermediation services to the broker of financial instruments in Israel. They do not concern a model, in which intermediation services are rendered to the bookmaker (in such case one must modify the applications described in points 1) and 2)), or when the device serves, in general, to accept mutual bets and cashing out the funds by reason of that. In the case of such model, the below applications to offices for interpretations generally do not make sense, and one ought to prepare new ones.
Please note that the below applications only form the basis for preparing applications that contain legal argumentation suited to the local provisions. The applications describe in great detail financial instruments proposed by us, but they do not contain references to the local provisions. Owing to this, it is necessary to amend and supplement them.
In all the below applications we wrote directly that monetary intermediation services are to be rendered to the institution (broker) in Israel. If it is more convenient to you, you can write that it is about an “institution registered outside the European Union in one of the countries of the Economic Cooperation and Development Area.” The emphasis on the fact that a company is registered in the ECDA is connected with the provisions of the foreign exchange law, which in every country of the European Union allows its citizens to acquire assets in ECDA countries without any limitations the same way they would acquire them in their native country.
In the case of the model of monetary intermediation to the broker of financial instruments:
1) first, it is necessary to make sure whether the use of the platforms described above in points a), b), c) or d) as a user is subject to restrictions of the provisions regulating gambling or not.
The following three applications ought to be sent by physical persons with the address in the territory of the country of the body, to which the application is addressed to. Each of the following applications ought to be sent by a DIFFERENT physical person with a different residence address. Sending this kind of application by a physical person, and not a legal one, is important as then the body will not consider the application in bad faith, but from the point of view of an application of a citizen who is very eager to invest in accordance with the provisions of law. Persons who make such applications and receive a positive interpretation ought to sit in the management board of the company that later on will perform monetary intermediation services to such broker platform, which will protect them against any possible penal responsibility in the event of any persecution of any of the projects.
One ought to submit the following applications: Application No. 1 (important with respect to the platforms: a), b), c), d)); Application No. 2 (important with respect to the platforms: a), b), c), d)); Application No. 3 (important with respect to the platforms c) and d)); Application No. 4 (important with respect to the platform described in point e)) Application No. 5 (important with respect to the platform described in point f))
In the event that the applications are submitted in the country where monetary intermediation services will be rendered to the platform where the drums do not rotate, but the icons revolve around their own axis, Application No. 1 must be changes accordingly. The images in the application must be changed to those from another visualization if monetary intermediation services are to be rendered to the platform with visualizations containing icons that are not connected with gambling in any way.
All the above applications ought to be sent the gambling games regulator (in most cases it is the Ministry of Finance). Furthermore, we advise to send all the above applications to a relevant tax institution. In the majority of countries, there is special taxation of profits generated from investing in financial instruments, and there are also special offices obliged to reply to the citizens’ queries in the scope of the tax law. It is also significant due to the fact that the gambling market regulators, if any, most frequently do not have the obligation to reply to this type of queries, especially when they are complicated to a very large extent. The applications to such tax information office for interpretations ought to be sent in such a way that the replies are binding not only in the scope of the tax law, but also that they settle the problem of qualifying a given platform as an investment or gambling one, and such interpretations will be most binding.
The failure to obtain positive interpretations in the scope as above is subject to penal responsibility in the event of a different interpretation later on of administration bodies, and accusing us of committing a crime through assistance in enabling the users of a given country to invest money on the platform, from which the use of services is forbidden. The assistance in the performance of a forbidden act by those citizens would consist in this case in helping them to transfer the money to and from this platform, without which, they would not have been able to perform this forbidden act.
Application No. 4 is important as Bitcoin does not possess the status of a currency in every country, and, as a result, a financial instrument, for which Bitcoin is a base instrument, cannot be deemed as a currency instrument.
In the event of intensive persecution of the operation of the gambling machines, we suggest submitting to the institution of the highest rank, being a regulator, a query such as the following: Application No. 6
and, after receiving a positive response, send Application No. 1 to the institution of a lower rank or, (best) to the head tax information institution or other, which could provide a binding interpretation along with the attachment forming a response to Application No. 6.
We advise that you send Application No. 6 and obtain the reply before sending Application No. 1 in every European Union country, as not in every European Union country the legal provisions specify directly that financial instruments are not subject to restrictions imposed by gambling provisions, which is why we recommend that, before sending Application No. 1), you should send and obtain a reply to Application No. 6). In addition to Application No. 6), we advise to send Applications No. 2) and 3), whereas Application No. 1) we advise to send only upon the receipt of a reply to Application No. 6), and best right away to the institution responsible for the interpretation of the tax law, enclosing there to the application the reply to Application No. 6) instead of provoking the regulator of gambling games.
2) Another interpretation, the MOST IMPORTANT ONE, is the interpretation of the supervisor of the capital market and trading in financial instruments whether the scope of services that we perform by means of the machines, enters the regulated area, and whether a stockbroker’s license is necessary for that.
Application No. 7 This application ought to be sent by a physical or legal person who will subsequently render monetary intermediation services.
3) The last application ought to be the application for issuing an interpretation to a relevant office for the execution of provisions on preventing money laundering.
We propose that the application should concern a business model as the one attached above, that is, a business model that assumes, above all, the performance of monetary intermediation services based on the so-called transaction windows, and then with the support of the so-called terminals. In the event of using a terminal, we require that its work should be supervised by the staff on the premises in connection with the procedure of preventing money laundering precisely.
Despite the kiosk supervision by a physical person, as a rule, we do not verify personal data of people performing deposits or withdrawals below certain amounts specified in the provisions of the law. Thus, it is necessary to check how much they amount to. For example, if the provisions of the law of a given member state of the European Union do not state otherwise, they are as follows: a) in the scope of deposits, in our case, it is allowed, according to the law, to perform deposits without verifying the sender’s details up to the amount of EUR 1000 (article 5, section 4 of the Regulation 1781/2006 of the European Parliament and of the Council). b) in the scope of withdrawals, in our case, it is allowed, according to the law, to perform withdrawals without verifying the receiver’s details up to the amount of EUR 15000 (article 7b of the Directive 2005/60/EC of the European Parliament and of the Council).
In addition, the verification of details of the clients performing an order at the device (or at the transaction window) is required in the event of the premises staff’s justified suspicion that the person performing the transaction intends to perform an activity related to money laundering. Such a suspicion may arise based on a strange behaviour of such a person or her/his performance of transactions that are smaller, but appear to be connected and broken down for the purpose of avoiding the verification of details by the premises staff.
In the scope of the above-mentioned amounts, one ought to obtain an interpretation that will protect the board from penal responsibility by reason of insufficiently strict procedure of preventing money laundering. In connection with the foregoing, we propose that you should submit to the body executing provisions on preventing money laundering the following application: Application No. 8
The collaboration with us is conditioned upon submitting to us for approval any applications for interpretations sent to public administration bodies. The preparation and submission of applications that are written incorrectly, use wrong argumentation or describe the project improperly may end in issuing a wrong decision, and deeming our undertaking as gambling. Such a decision may result in blocking access to a particular market.