Letter from CEO -2020


Dear Polybius stakeholder,


This will be a long read, but please stick with it and don’t TL;DR me 🙂 As we approach the end of 2020, I believe it is important to provide you a firsthand account of our hard work. Lately, we have been subject to unpleasant scam accusations in what we believe to be a coordinated effort to tarnish the company’s reputation. Accompanying this is aggressive market selling operations that are creating pressure on the token’s price. It is currently the most undervalued it has ever been.


We hope this letter will set the record straight and answer key questions we’ve been receiving from the community. 


As we head into the new year, it’s time to reflect and make exciting plans for the future. Right around this time two years ago, we finished onboarding the core team and began working on the Osom Finance project.


Over those two years, we have completed a tremendous amount of work andб because of this, we are extremely well-positioned for 2021. Next year is set to become the most pivotal year for the project. Aside from the fact that Osom Finance is gaining a lot of momentum, we are launching several new initiatives in 2021, which will propel the project forward.


Regulatory interactions have proven to be the main headwind as both us and some of our key business partners were, after intense exchanges with EU-based financial regulators, unable to proceed – for now at least – to receive the licenses we have been targeting. This has caused us to temporarily pivot and rearrange some of our business goals, while still maintaining our broader vision. Our situation is not unique – even large projects like Facebook’s Libra, or most recently Ripple, have come under undeserved and unfair regulatory scrutiny. It is disappointing that after all these years,traditional financial regulators are still uncomfortable with crypto and are reluctant to give the industry a seat at the table of the regulated entities. However, we are hopeful that regulators will come around and realize the tremendous positive societal change that has come as a result of crypto. To that end, we are in regular dialogue with EU institutions like DG FISMA (the unit of the European Commission responsible for financial markets) and are continuously exploring all possible options.


While we may be a bit ahead of the times with Osom Finance, it is certain that the move for the convergence of fiat and crypto finance is here to stay. Hence why we are still, more than ever, standing behind Osom’s vision — “Guide humanity to money zen”. This means creating an easy place to manage all of one’s finances, regardless of their denomination.  Nonetheless, our experience with regulators thus far had made us realize the following:

  • We need to demonstrate our reliability and professionalism through the services we are allowed to offer for now i.e. crypto. This is how we can best prove our good intentions.
  • Separately, we have several ongoing partnership discussions regarding providing licensed activities from under someone’s wing. Although they require a detailed negotiation and structuring, we are coming to view this as increasingly more viable short to mid-term solution. This should provide regulators reassurance as we would be working in tandem with one of their subjects.


Our efforts on the crypto side are proving to be successful as we have been shortlisted for the “Best for Crypto Trading” and “Best for Beginners” categories of the Investment Innovation Awards 2020 by the IHODL team.


In any event, we have every intention to persevere and ensure the success of the project even if it involves pivots and reprioritizations. In January we will flesh out a more precise roadmap and publish it.


We would now like to take a look at some of the key developments over the past couple of years:


  • We built a solid team


From the outset, we wanted to keep all of our work in-house. This was done both to meet regulatory requirements as well as protect our intellectual property. Building a team is more than paying recruiters, getting CVs, negotiating salaries and signing work agreements. It’s a careful process to match skill sets, past experience and personal fit. A well-curated team is integral to the success of a company as it is the core propelling it through thick and thin. We are proud to have built a 30-strong team split across Europe that is united by a drive to push the project forward.


  • We were in intense negotiations with the National Bank of Belgium. 


Our Belgian legal advisors, who are very experienced in financial licensing processes, expressed with certainty that we had one of the best-prepared license applications they’ve ever seen. The draft application has been submitted to the National Bank several times. This is a standard process whereby the Bank reviews the draft, suggests amendments and requests re-submission. They have duly scrutinized the project including review of our technical setup, evaluation of the business plan, and thorough review of the business processes. Just as we had finished addressing all the comments and started preparing a final submission, the regulator invited us to a conference call to inform that they were not prepared to proceed with our application. This came unexpected for us and our legal advisor. Our view is that our application had fallen victim to a political process, whereby the regulator was not comfortable overseeing a project with a crypto element in it.


  • Management subsequently identified a business opportunity to provide whitelabel services.  


The process of seeing Polybius team’s struggle, but also inspired by numerous stories from peers, Osom Finance’s management team set up and funded an independent company out-of-pocket. The company applied for an AISP/PISP license in Estonia with the goal to make AISP/PISP services available to Polybius and a handful of other companies in the digital asset industry and beyond. By then, the management team had cut its teeth on the Belgian application and was able to submit its application in Estonia in April 2020. Aside from Polybius, they had several other companies lined up that were ready to use the service. Albeit the most visible support was from Polybius and we were thoroughly humbled by our community who petitioned the regulators. Despite its high quality as attested by our various advisors, the application was met with resistance. The regulator gave a multitude of reasons, but two which particularly stood out were their opinion stating that we had an unconvincing business plan and their general uneasiness with crypto and the reputation associated with it. We found this very puzzling as there are several companies in Europe providing whitelabel services in finance. Solaris Bank comes to mind as an example — they are purportedly running a very successful business.


  • We were granted upgraded Estonian crypto licenses. 


In 2020, Estonia significantly tightened its crypto licensing laws. As a result, over 70% of crypto firms got their licenses revoked. We were not only amongst the few remaining crypto firms that were re-authorised, but also came out with strong yet extremely user experience-focused compliance processes. This allowed us to strike a fine balance between providing a delightful user experience and ensuring regulatory compliance. This has made it clear to us that our short to mid-term opportunity is in crypto-banking i.e. providing cryptocurrency-based services. Amongst others, we are hoping to also allow the buying and selling of PLBT through the app.


  • We expanded the crypto offerings of Osom Finance. 


All this time, we have been driving forward the digital asset functionality of the app. Aside from delivering a no-frills wallet and exchange functionality, as well as multiple fiat bridges, the team unveiled the Crypto Autopilot. This is an algorithmic trading bot, which was the result of close cooperation with InvestSuite, a Belgium-based trading bot development company. The product was unveiled in May 2020 just as the world was coming out of the first Covid wave and reeling from lockdowns. We were impressed by the reception of the product, particularly by the more experienced folks who got into crypto for the long haul. Despite the initial mix-up of the marketing message, the product has now found its audience in Europe-based users, who are looking to diversify their wealth through crypto. The Crypto Autopilot is a trading bot focused on diversification and thus allows its users to trade an array of crypto assets with a limited bias.


  • We’ve been feeling out B2B opportunities. 


While our focus today remains on B2C, we have also been exploring B2B opportunities. We have a live integration case right now, whereby a wallet provider is looking to use our infrastructure to facilitate exchange operations. Furthermore, we have had numerous early-stage conversations with banks in Belgium, the Nordics and Switzerland about the usage of our infrastructure to deliver high-quality crypto services on their platforms.


  • We furthered R&D of the marketing channels. 


The typical marketing playbook employed when it comes to promoting a product online usually includes the use of Google and Facebook. Given our emphasis on crypto, we have quickly figured out that none of this works for us. Moreover, many available channels offer muddled tracking which further increases the risks of overpaying for leads. Following a tremendous amount of patience, as well as R&D, we have developed a proprietary set of channels and approaches, which allow us to acquire users, on average, for low double-digit amounts. This is a more competitive number, which is a lot lower than some of the best fintechs have been able to achieve in the absence of crypto-related limitations. Another core achievement we’d like to show off is that every second user to register with Osom Finance passes KYC, thus demonstrating readiness to use our service.


  • We have been addressing legacy issues. 


This may be the least pleasant part of our job, yet it still needs to be done. We had been in a long judicial dispute with a disgruntled token holder, Maksim Velichko, who sought to blackmail some of our directors in an attempt to get us to return his tokens, as token performance was not in line with his expectations. All three instances of the Estonian courts – including the Supreme Court – have sided with Polybius in that said individual had no basis to return those tokens as he was made very well-aware of the risks at inception. Our second legacy issue involves our ICO infrastructure provider, Ambisafe. While they initially appeared to be a reliable partner, their service has become a hindrance as ever more token holders had their PLBT stuck in the ICO wallet and had to wait days, weeks, sometimes even months, to be able to withdraw.  We have already made an attempt to take over the infrastructure and manage it ourselves, which would, at a minimum, allow us to control and thus resolve these issues faster. However, their systems had been designed to hold clients hostage; they claim to be unable to hand over the PLBT part of the infrastructure to us. We are continuing to try to work out a solution as the bottleneck is very frustrating to both the token holders and ourselves. 


So as we come out of the discovery phase of the project, we are setting some ambitious goals for 2021:

  • To make Osom Finance self-sustainable, if not profitable. 


For this, we will be focusing development on the crypto product, trying to target different  customer groups as well as experimenting with various pricing models. On one hand, this will allow us to temporarily reduce legal advisory fees (which is a major expense item in the licensing application). On the other hand, we will focus on growing the various crypto services to deliver more advanced crypto accounts, deposits and other products you’d expect to be part of a premier crypto banking experience.


  • Proceed with more active capital management as announced during the ICO. 


While working on positioning Osom Finance for greater self-sustainability, we will be managing the treasury more actively by conducting investment activity as communicated during the ICO. We are currently in discussions with several professionals who will come onboard and assist us in this endeavor. Nevertheless, we have already been taking advantage of some of the less risky crypto deposits and similar products to deploy the capital held in our treasury.


So finally, on this note, we want to wish everyone a happy holiday season and happy entry into 2021. There is a lot to look forward to in the coming year. This past year has been a challenging one for many for a multitude of reasons, but we are coming out strong and confident that we are very well-positioned for an exciting future!


Warm regards,

Anton & Osom/Polybius teams