A Miami-based CBlocks team made roughly $32,000 in a month’s time by selling a mystery box of cryptocurrencies to those who are new to trading crypto. Soon enough, the team supposedly stopped processing orders to avoid legal issues. More specifically, CBlocks is planning to move to Canada, in the hopes of cheaper regulatory expenses.
CBlocks was created by Auston Bunsen, PK Banks and Mario Aguayo. Their goal was to help newbies to the cryptocurrencies, by eliminating the research aspects for users. Simply put, users will indicate how much they prefer to invest, and the risks they are willing to take, and the rest is determined by CBlocks.
The entire process is believed to be simple: those who are interested in investing in crypto will have to pay the CBlocks the amount to be invested as well as a $50 service fee. The team then purchases five currencies on behalf of customers and loads them onto an encrypted USB stick that serves as a hardware wallet.
CBlocks – How It All Started
Bunsen is a self-taught programmer, a serial startup founder and engineer, Banks is a former Wall Streeter and Aguayo, a student at the time it all started. The three were discussing matters when the topic of cryptocurrencies came up. Bunsen suggested Aguayo to invest in five random cryptocurrencies as a starting point. Eventually, Banks informed his mates of the payment he received for loading cryptos onto ledgers. This was when the idea of CBlocks flourished.
While the three are relatively new to cryptocurrencies, none of them considered the associated regulations. CBlocks went onto hiring lawyers from two different firms, only to find themselves more confused as to whether they are “a money services business or not”. According to Bunsen, the U.S law was unclear, which led them to make the decision to move to Canada.
Cryptocurrency Regulations: Canada Vs America
Due to all the confusion, CBlocks stopped accepting orders and made the necessary efforts to launch their business for Canadian customers by the end of May. Bunsen went on to say that “Canada has much a friendlier regulation when it comes to cryptocurrencies. They only require a federal registration.”
This is not the first time American founders struggled to come up with an appropriate title for their businesses. Many believe that the lack of clarity on the federal Securities and Exchange Commission’s (SEC) part, in regard to cryptos and tokens, is mainly to blame for.
Where does CBlocks Currently Stand
When considering CBlocks’ current situation, it is the service of providing encrypted USB drives with cryptocurrencies that is confusing because some of the tokens might be considered securities, which easily makes their business one of providing money services. If this is the case, then the fees tied to running the business is way too high for it to be profitable.
Hence, CBlocks will only be providing its services to Canadians, but the team members will still remain in Miami. Apparently, for the same services provided, Canada does not require a registration fee, nor does it require the business to be licensed. For CBlocks to operate in Canada, at least one member must be a Canadian citizen to qualify for FinTrac.
In terms of CBlocks’ future plans, Bunsen said the following,
“we’re currently in conversations with a number of VCs and angel investors… we’re in the process of raising a round, and once that is done, we hope to take this thing to the moon.”