In this video, you will see the first part (out of two) of the interview with Cory from CoinBros. In this part, he will talk about the CoinBros as a company and explain how Bitcoin ATMs work.
After telling a story on how he started to gain interest in Bitcoin while he was a paramedic and finally started a Bitcoin ATM business in 2017, Cory was asked to explain how is cryptocurrency stored in the machine.
He explains that you can link the ATM directly to the exchange via API or you can use the cold storage wallet. Linking directly to an exchange is less risky because you buy or sell crypto live and that way you cannot become a victim of volatility. On the other hand, by storing the crypto in the wallet you can lose a lot of money if the price keeps going down like in 2018, or you can earn much more in an opposite scenario.
The next question was, understandably, about fees and why are they so high according to some people. Cory than explained the story behind it and listed out all of the costs that he has to pay in order to make it easier for people to buy or sell their crypto. The main expenses he mentioned are maintenance, compliance officer, rent, armored car pickup, marketing … and he went even further and compared the 10% they charge against the clothes we wear whose markup is from 30% to even 400%. He also compared the ATM and the Exchange, saying that in the exchange you get charged a lower fee, but you have to go through an extensive verification process and at the end, you are again at the risk of hack attacks, while on the ATM you just go to the location and trade your crypto safely in a matter of minutes.
He admits that some companies charge an unreasonably high fee (45% – 50%) which he doesn’t approve, but he also appeals to people to do a little research and find ATM companies that charge reasonable fees and they will be very satisfied.
Further on, Cory briefly touched upon a topic of regulation. He says that each state has its requirements but a lot of them are under the same umbrella. Some states require a money transmitter license, others say that you need to be registered under FinCEN and to have an AML/KYC policy and a compliance officer. So, there are a lot of gray areas but the bottom line is that you need to abide by all the rules and regulations if you run a Bitcoin ATM company, because if you don’t you are definitely going to jail, and it’s not worth it.
Talking about the plans for the future Cory explains that they want to keep going forward with a lot of momentum and not let anything divert them from their plans. He claims that they have a good brand and they do a lot of good things for the community so it’s much easier for them to get good locations which allows them to even get picky which was not the case at the beginning.
As per him, the CoinBros ATMs have an option to buy and sell crypto where you can trade in Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. He also notes that they can configure their machines to sell any coins they want but advises to be careful with Monero and other total privacy coins where things could get a bit tricky.
The last question in this part of the interview was related to the procedures that the client needs to follow in order to use the CoinBros ATM. Cory explains that they try to keep it as simple as possible for the client while following the KYC/AML policy and protecting them from scams. If you want to buy up to $900 you just need to enter your first and last name and your phone number in order to receive a code in a text message. If you want to buy more than that, up to $3000, you will need to register on the ATM and scan your ID on top of that. And in case you want more than $3000 you will need to give them a call and provide a bit more data. He assures us that their main concern is to prevent scams and making sure that people aren’t sending their Bitcoin to third party wallets or buying on behalf of other people. If a person answers a security question a certain way, it triggers a lot of red flags which let them know to turn down that transaction. He claims that they actually turn down a lot of suspicious transactions in order to keep their customers safe and abide by the regulations.
So, to summarize the first part of the interview with Cory, there are a lot of expenses behind the ATM business which makes the fees higher than exchanges, but safer and easier. If you want to run a steady business be sure to follow the regulations and protect your customers from scams. Also, be careful with the choice of coins that you enlist in your machines.