Polish payment process InPay made headlines last week, announcing it will allow investors to secure company shares using Bitcoin.
The Warsaw-based firm is using crowdfunding service Beesfund in a first-of-its-kind initiative in the country, and indeed for the Bitcoin industry itself.
Given the constantly shifting regulatory environment, such an idea is not without its dangers. An attempt by Dutch entrepreneur Eric Voorhees earlier this year gained much publicity when it culminated in Voorhees being required to pay tens of thousands of dollars in fines after failing to secure the necessary documentation.
InPay has learnt from the mistakes of the past, it says, and its US$60,000 crowdfunding scheme is being driven forward with a sense of increasing optimism and excitement.
Cointelegraph reached out to CEO Lech Wilczyński to talk about the project and check on progress, ahead of the campaign deadline on November 16.
Cointelegraph: What made you originally identify Bitcoin as a tool for funding Inpay's growth?
Lech Wilczyński: We help businesses in Poland to understand why and how they should accept Bitcoin payments. In fact it's a long process sometimes. Our software and legal solutions are an important step towards convincing them to use this still "scary" technology.
For us, using Bitcoin as method of receiving investments was completely natural. Thanks to cooperation with crowdfunding platform – beesfund.com – we allow investors from all over the world to invest in polish joint-stock companies.
What's interesting is that we also allow other forms of money transfers though we see their inferiority first hand. PayPal payments are often held for 24h and subjected to 4% fees. Other local method of payments cut 2.5% of electronic fund transfer. Bitcoin payments, which count for more than 60% of all current crowdfunding campaigns, require no such fee, which shows how much we can save using digital currency.
“The real threat is not in legislation but in the way banks themselves will treat Bitcoin related companies. “
- Lech Wilczyński
CT: Like many EU states, Bitcoin legislation is currently a very dynamic area in Poland. How is Inpay geared towards short-notice and potentially serious changes in the local legislative environment?
LW: In Poland Bitcoin’s legal status is still not clear and we're lacking a proactive stance from the Polish Ministry of Finance, which is waiting for the European Commission’s ruling. That's why all Bitcoin related operations are handled by our UK branch for the time being. The real threat is not in legislation but in the way banks themselves will treat Bitcoin related companies.
They're still a mandatory element of infrastructure for payment processors. For that reason we plan to include NAC's Aten Black Gold Coin (www.atencoin.com) as another payment option, which by design uses Anti Money Laundering (AML) control systems to manage customer identities and record keeping requirements.
If banks will continue to force Bitcoin companies out of business, just like recently in Norway, this I believe will help to continue operations and still benefit from the decentralized nature of cryptocurrencies.
CT: What would you say to potential investors still unsure of the stability of the scheme, especially given the awareness of Eric Voorhees' significant problems on attempting a similar concept?
LW: To be compliant with financial regulations we had to establish a joint-stock company. In the EU it is allowed to sell publicly, up to 100.000 euro worth of shares per year without preparing a prospectus or going on a stock exchange.
In the UK the limits are much higher. Next, all marketing materials and schedules must be accepted by Financial Supervision Authority before going public. There is no way to promote your own equity crowdfunding before and all changes have to be submitted for evaluation. So having a good legal department is key.
“Next year, stocks of more than 80 polish companies will be available for Bitcoin and without unnecessary transaction costs.”
- Lech Wilczyński
We saw first hand how the assumed simple procedure was complicated and expensive. We have to send prints of named shares to all shareholders. It is easier and cheaper, in orders of magnitude, to use blockchain technologies like Counterparty or Colored coins but that’s still in the future.
If we want to be compliant, we had to resort to what was legal. Anyway, shareholders will receive legal documents of named shares, and what is important: they can buy them with Bitcoin. It's one step at a time and a way for more conservative investors to enter the crypto-currency world by buying stocks of the Bitcoin related company.
Another positive aspect is the ability for people from all over the world to invest in Polish companies without any restrictions to flow of capital. Next year, stocks of more than 80 polish companies will be available for Bitcoin and without unnecessary transaction costs.
CT: Do you have expansion plans for Bitcoin integration with Inpay should the crowdfunding campaign be successful?
LW: Successful equity crowdfunding campaign will help us gain speed and awareness. It's already a huge success since this is actually world's first equity crowdfunding for Bitcoin, which gave us good publicity and a lot of new clients. We have to move fast because contrary to many naysayers, it will be a very competitive market soon, just like exchanges are right now in Poland.
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