FinanceFeeds Podcast Ep.#15: Cogni’s Simon Grunfeld on FDIC-insured Crypto app

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The FinanceFeeds Podcast has returned for its 15th episode with our Editor-in-Chief Nikolai Isayev exchanging insight with Simon Grunfeld, Head of Web3 of Cogni.

Simon Grunfeld is known throughout the FX industry because the founding father of Gallant FX, a PaaS world chief in Forex buying and selling applied sciences serving both retail and institutional purchasers. He left the FX enterprise in 2010 when the Dodd-Frank invoice was launched and put into effect in the United States.

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He then ventured into the world of digital assets, first because the founding father of OTC crypto options for five years before becoming a member of Apifiny, a blockchain pioneer, which was the primary platform to tokenize real world assets (RWA) and do something with collectible items even earlier than NFTs.

During the COVID-19 lockdowns, he worked as a Senior Consultant of NFT platform, VeVe, and performed the position of VP of Crypto at SIMBA Chain earlier this year to assist them with token issuance and file a patent for issuance compliant with the US regulation.

It was in July 2022 that Simon Grunfeld was appointed Head of Web3 at Cogni, the NY-based digital financial institution that gives easy access to Web2 and Web3 companies throughout traditional finance, crypto, NFT’S, gaming and the metaverse.

Cogni addresses fears within the aftermath of ‘crypto winter’

The expression “bridging the gap” was the first topic to be discussed as Grunfeld pointed out the immense vagueness of the assertion incessantly used by firms inside the ecosystem – “What are you bridging exactly?” – and the shortage of problem fixing. “Sounds really good in concept but in practice you’re causing extra issues than what you needed to begin with”.

Cogni, then again, is really addressing a problem confronted by the millions of crypto customers that keep awake at night out of worry that their centralized platforms might be next within the string of bankruptcies affecting the digital asset space, and not being ready to withdraw their hard-earned cash or digital belongings.

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The words “not your keys, not your crypto” are taken to coronary heart at Cogni. “We are bridging the hole between Web2 and Web3 from a banking perspective in a sense that Cogni is rolling out the very first non-custodial crypto wallet and banking app”, stated Grunfeld. “It’s part of your banking experience to custody crypto, send and receive crypto in your pockets, the place you – not Cogni – however you, the user, own the keys. If you don’t like our app for whatever purpose, take those keys to another pockets. We don’t have any management over that”.

“We don’t need customers to trust us”

What makes Cogni fully different from all the platforms that have gone under – FTX, Voyager, Celsius Network, and so forth – is that every single dollar that’s deposited by users is FDIC insured. This can solely be accomplished with a banking license.

“We don’t need users to trust us as a result of you’re in full management of your crypto and your fiat deposits are FDIC insured”, he continued. “If we decided tomorrow to go belly up for no matter cause, you’re gonna get your money back and your belongings are yours to move wherever you need to move them.

“This is true bridging between Web2 and Web3: the security you could have with the FDIC and the information that we can’t maintain on to your crypto. It’s yours and yours alone.”

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The lifestyle-focused digital banking platform has already undergone the first part of product releases and is now making ready section 2, which will be rolled out in Q2 2023 to broaden support to a selection of blockchain EVMs, together with Bitcoin, Ethereum, and Solana.

CeFi platforms offer non-deliverible merchandise like CFDs. Cogni delivers the crypto

Cogni and its FDIC-insured banking app is a completely different ball sport than centralized platforms. One key difference is that CeFi merchandise are non-deliverable digital assets – very similar to contracts-for-difference (CFDs) – which signifies that there is not a delivery of crypto belongings. In different phrases, “if they go belly up…good luck!”, he reiterated. “If you buy via Cogni, it’s yours. It doesn’t belong to us.”

Grunfeld also pointed to a novel solution on the fiat facet of the operation. “Show me a platform that is offering FDIC backing to deposits. There’s only one to my data. Nobody else can achieve this and for good reason. They’re speculating with your funds. We don’t do that. We’re a banking platform”, he explained, reminding Nikolai that he has worked a lot with centralized platforms and understands the loopholes that platform suppliers use to govern their users. Cogni, nevertheless, has taken an strategy the place it doesn’t need users’ trust. “We don’t have access to your money.”

Lifestyle, carbon footprint, sports

Cogni’s unique worth proposition doesn’t cease at non-custodial crypto providers with FDIC-insured deposits. The platform offers instruments and utilities that make life interesting and likewise raises awareness of carbon emissions by serving to users to grasp the carbon footprint associated with their every day spending. Carbon credit, nonetheless, aren’t in the roadmap due to trust issues. Until regulators begin taking motion, anyone can easily set up a carbon credit score shop and fraudulently claim they’re providing true carbon credits, he admitted. “I’m not saying they’re all crooks, however there are lots of crooks”. As a facet note, he reminded that the crypto ecosystem has been a pioneer of the inexperienced transition. Ethereum’s move from proof of work (PoW) to proof of stake (PoS), which has drastically decreased overload by 99%, is a strong example of that.

As to its way of life vocation, Cogni has already garnered interest from massive brands and is bringing them to its ecosystem so they can create NFT drops for customers and construct communities with unique access and experiences.

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An example of that may be a partnership with sports activities school platform, Campus Legends, with the intent of catering to college athletes looking to build their fan base ahead of a potential professional career in the massive leagues.

Cogni holds the future KYC commonplace for Web3 firms

Grunfeld is awaiting guidelines and rules to set in. Once they do, the laissez-faire days within the crypto space might be over, KYC/AML requirements might be everywhere, and corporations will face a crucial downside: “How do I confirm users?”

Cogni has the solution: the ‘Passport’ – a KYC normal that “bridges the finesse of Web2 KYC with the portability of Web3”.

The ‘Passport’ addresses firms’ want of figuring out who they’re catering to throughout the complicated world of Web3 and in a compliant means. So how can or not it’s done? “The more you utilize your wallet, the more I can learn about your interactions”, he mentioned, pointing out to new platforms that function as a VPN or proxy. which can report interactions and construct out the person profile, thus allowing Web3 firms to higher cater to users.

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So what makes Cogni different? “When you open an account with us you’re successfully opening a bank account”, he stated, adding that the platform tracks consumer behavior by way of a non-transferable token – also known as soulbound token – which can’t be faraway from the pockets.

This token allows Web3 platforms to verify that a sure pockets is permitted by Cogni. And in the occasion they want a duplicate of that information, they’ll pull it utilizing the Cogni KYC commonplace. Information is encrypted and put on the chain, as an alternative of being kept on a centralized database. This ensures protection within the event of a security breach.

The interview with Simon Grunfeld additionally coated how his passion for NY Yankees hats practically got him in hassle in a Boston restaurant, as properly as the international incident that is the collapse of FTX and the lessons realized from that, which all the time brings again to a completely hands-off model that follows the motto “not your keys, not your crypto.”

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All previous episodes of the FinanceFeeds Podcast are available on all popular streaming audio platforms.

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