Netcoins – State of the Nation

Reflecting back on my journey since taking the reins in June 2022, I can’t help but acknowledge what has been an exciting journey in one of the most trying years in the crypto industry. As the President of Netcoins, it is my foremost responsibility to prioritize the business aspects and shape our vision for the future. This year, we achieved a significant milestone by reaching 200,000 registered customers in Canada, all while continuing to grow our team. Throughout 2022, we expanded our workforce, successfully avoiding any layoffs, and now proudly employ 50 full-time remote employees across the country.

The industry has faced mounting pressure with the fall of Celsius, 3AC and FTX. This has undoubtedly shaken the industry to its core, not due to a lack of trust in crypto, but primarily because of poor management. The fall of these significant players not only affected the overall crypto market but tarnished our industry’s reputation, making it a poster child for mismanagement and bad actors. As these events unfolded, we took immediate action to ensure that Netcoins customers were safe. We confirmed that Netcoins had no exposure to any of the defaulted companies and were fortunate enough to have no contagion effects from our partners. While there are regulatory pressures and uncertainties in the US, we continue to follow the latest statements, rules and regulations to ensure that our platform continues to conform with expectations.

Netcoins also took into consideration the market and financial forces that were affecting the industry. From this, we reduced our expenses significantly. We have cut them in half compared to last year through a deep review of tools, technologies and rationalization. Our primary focus remains on increasing our sales and expanding our revenue streams through Product and Market growth. As the Canadian market undergoes consolidation, Netcoins will be actively seeking partnerships that can facilitate our business expansion in a scalable manner.

Netcoins has revitalized its mission to make Crypto investing easy for North Americans, with a fast, safe and transparent approach to everything that we do.

Additionally, Netcoins has placed an increased emphasis on listening to our customers like never before. We have taken a deliberate approach to actively engage with them and understand their needs. After synthesizing the key themes from their feedback and conducting thorough research, we have identified the following values that will form the core of our operations:

Safety and Security

Netcoins puts safety first, which includes a number of protections, from two-factor authentication to account security calls to ensure that you have control of your account and that it remains secure. Netcoins is on AWS Cloud and has significant security and protections in place for its systems. Netcoins uses BitGo as its qualified custodian. BitGo enables Netcoins to create cold self-managed wallets and to securely store digital assets in qualified, cold-storage custody at BitGo Trust Company, which recently increased its insurance coverage to $250 million USD. Netcoins has been using BitGo since 2018. Netcoins also has Coincover insurance for its crypto assets held by the company.

Separation of Operational and Customer Funds

At Netcoins, all operational funds and assets are held separately from customer funds and assets. This critical measure demonstrates our unwavering commitment to ensuring the safety and security of our customers. It serves as a crucial lesson learned from the collapse of FTX.

By adhering to these principles, we aim to instil confidence in our customers and provide them with a secure and trustworthy platform. Netcoins has implemented and continues to practice two crucial actions:

Non-Commingling of Customer Crypto Assets: At Netcoins, we strictly adhere to the principle of not commingling customer crypto assets. This means that we keep customer assets separate, ensuring their integrity and security.

Non-Commingling of Customer Funds: Similarly, Netcoins does not commingle customer funds. We maintain a clear separation between customer funds and our own operational finances, reinforcing our commitment to safeguarding customer assets.

Transparency and Simplicity

We are transparent; we post all of our information about our company online, we are audited by KPMG, and our financial statements are part of our parent company, BIGG Digital Assets reporting. We also keep our Fees straightforward and easy to understand, to simplify everything during a trade. Netcoins’ decision document and operating rules can be found directly on the BCSC website.

Social Engagement

We are more engaged socially than ever before, with our Monday Morning Brew providing market news each week, and engaging with our Twitter community, which grew to over 7,200 followers. 

Regulation

Netcoins is classified as a restricted dealer in Canada, under the supervision of the BCSC and across Canada. We have been working with Canadian regulators since the inception of regulatory relief in Canada, having requested regulation during our growth phase. We are proud to be working with our regulatory partners, developing a safe and secure crypto ecosystem for Canadians.

Proof of Reserves

Netcoins is committed to providing our customers proof of reserves, which you can find on our website. We will continue to do this on a quarterly basis.

Netcoins is moving beyond a ‘getting started with Crypto platform’ to an intermediate trading platform that empowers North Americans to fully embrace their crypto journey.

Over the last 12 months, Netcoins has been focused on 3 essential strategic pillars: Product and Technology, Experience, and Expansion. Each of these pillars has led us to the incredible platform that you see today.

Product and Technology

We will launch and evolve products and features that amaze our customers while seamlessly bridging their fiat and crypto experiences.

In terms of our products, our focus lies at the intersection of technology and crypto assets. Over the past year, we have made substantial progress in catching up and closing the gap. We increased our inventory of crypto assets from 6 to 37, with a focus on quality, popularity and sustainability. We perform rigorous analysis on these assets to ensure that they are suitable for our customers. During the second half of 2023, we will continue to grow this listing and add additional trading features to improve the overall trading experience with Netcoins as we move beyond just ‘getting started with crypto’ to cater to intermediate and advanced crypto traders.

In the past year, Netcoins saw over $400,000,000 in crypto trading volume, a significant feat, especially during a bear market.

Netcoins Pay experienced significant growth with over 5,000 users and more than $9,000,000 worth of transactions flowing through our card. We updated our issuer via KOHO, from Visa to Mastercard, which is a market leader in Crypto Prepaid cards. We also revamped the look and feel of the card to match our enhanced Brand. We hope that whenever you pull out the physical card, you are able to show off our great new branding and enjoy the convenience of our Apple and Google Pay support. You can also lock and unlock your Card at any time to ensure that you are in total control of your Card at all times. We believe that this is a great product for Canadians to stack sats through everyday purchases, and we will look to grow Netcoins Pay during 2023. In an average month, Netcoins Pay users are earning over $6,000 worth of rewards!

If you spent $2,000 on your holiday shopping in 2022, your Bitcoin rewards would be worth 50% more today – I am not sure if you can name a better rewards program for Canada’s crypto-native consumers.

Experience

We will enhance our functionality, strengthen our community, and uplift our market perception by delivering an incredible user experience across all of our platforms.

During the course of the last year, we have significantly elevated our look and feel, re-launching our brand with more of a focus on Web3, and the evolution of Netcoins. We built out new websites for Canada and the US and implemented a fully revamped design for our Mobile Application.

One of our proudest achievements from the year is our Excellent Rating, with 4.5 stars, based on over 350 reviews on TrustPilot. This is a true testament to our exceptional customer service, transparency and real reviews. Based on this, we believe we are among Canada’s most trusted platforms, with the highest TrustScore amongst regulated Cryptocurrency services in Canada.

This sentiment was echoed when Netcoins was selected for the 2023 Excellence in Customer Service Award by the Business Intelligence Group.

Expansion

We will expand our offering in new markets and alongside partners that allow us to grow our footprint.

This year we partnered with Koinly to provide Netcoins customers with a simple and easy way to file their taxes in Canada. Our partnership enabled a Single Sign On (SSO) from Netcoins to Koinly to help customers calculate and report their crypto taxes to the Canada Revenue Agency. We participated in our first Twitter spaces engaging with hundreds of Canadians about our Taxes.

Netcoins USA launched at the end of December 2022, starting with 5 initial states and a mobile-only proposition. This included our new Brand elements and our exciting iOS and Android Apps. We have taken a state-by-state approach to registration, which is the only way to proceed with registration in the USA. This approach allowed us to listen to the market and find out the best way to evolve our Compliant No Fee value proposition to a busy market that is facing ongoing regulatory uncertainty.

Netcoins USA is now available in the following states, with more to come:

1. California
2. Colorado
3. Delaware 
4. Indiana
5. Kansas
6. Kentucky
7. Michigan 
8. Mississippi
9. Missouri
10. Nebraska
11. New Jersey
12. Oklahoma
13. Pennsylvania 
14. South Carolina
15. Utah
16. Virginia
17. Wyoming

We are working on our Money Transmission License (MTL) which will not only open up more largely populated states but will also allow us to begin digital advertising. This is an important part of the US registration process. While this has been a hurdle, it has allowed us to explore new opportunities and partnerships, which have included Integrated SiriusXM and Sports radio marketing during March Madness, Print Marketing in selected states, Radio during the NFL Draft and a new partnership with Barstool Sports Podcast ‘Bussin with the Boys’ which has tremendous reach amongst our demographic in the USA, and will have our advertisements seen on YouTube and heard on Spotify and Apple Podcasts. To further drive acquisition, we enhanced our Refer a Friend program to include cross-border referrals, allowing Canadians to refer their American friends and vice-versa.

Launching our MVP into the market was a significant step for Netcoins and shows that we have the ability to enter new markets and scale the business globally when it fits with our strategy. 

Netcoins will not look to additional global markets during 2023, however, we continue to monitor the situation in crypto-friendly markets such as Europe, the UK and Hong Kong.

Our business is strong. We have lowered our costs significantly, and we are working diligently to enhance our offering across the board. We recently launched another exciting product to the Canadian market, Netcoins Staking, which is one of the most demanded products in the crypto market. With this, Netcoins has one of the most comprehensive Crypto investment offerings in Canada, with Trade, Pay and Stake available to customers.

We look forward to the continued growth and success of Netcoins.