Can you go back over the history of Bull Bitcoin?
Bull Bitcoin is a non-custodial bitcoin exchange platform founded in 2015 in Canada. Our two main features are "non-custodial", meaning that we do not hold your bitcoins, and the fact that we are an exchange that focuses solely on Bitcoin. When a user buys bitcoins from us, they have to provide us with their Bitcoin address before they can finalise their purchase. It's the same for selling: when a user sells bitcoins to us, they don't make a deposit with us, but create an order to sell.
Why propose such a system?
This decision is ethical, practical and regulatory all at once. From an ethical point of view, our aim is not to allow people to have only exposure to the price of Bitcoin, but to encourage them to regain their sovereignty and individual freedoms. We want to train "bitcoiners" and not simply offer investment products.
On a practical level, for a start-up in the crypto industry, one of the biggest challenges is the secure custody of assets. By not providing this service, we reduce our costs and risks. Finally, from a regulatory perspective, not holding the assets takes a lot of the pressure off compliance, whether in Canada or Europe. Our users manage their Bitcoins themselves and we avoid asset management.
Why focus solely on Bitcoin?
As far as Bitcoin-only is concerned, I firmly believe in Bitcoin as the global reserve currency, a universal unit of account and a global means of payment. Our goal is to replace the fiat system with Bitcoin. That's what sets Bull Bitcoin apart from the competition.
What's the point of going through Bull Bitcoin if I can, for example, buy my bitcoins on Coinbase and send them to my wallet?
There are several reasons. Firstly, we have exceptional customer service that supports the user from start to finish. We help create a wallet, secure it and learn how to use it. With services like Coinbase, customer service is more impersonal, and there aren't necessarily Bitcoin experts at the end of the phone to answer specific questions.
Also, with Coinbase, it's easy for a user to leave their bitcoins on the platform instead of withdrawing them to a personal wallet, which carries risks as we saw with FTX. If you recommend a friend to buy Bitcoin via Coinbase, they might also be tempted to invest in other cryptos, which I call 'shitcoins'. With us, we eliminate this possibility. We also don't accept credit card payments, only bank transfers, and in terms of fees, we are very competitive with Coinbase.
"We have 100,000 customers worldwide" How does your system work?
Bull Bitcoin operates as an automated OTC (Over-The-Counter) service. We don't have an order book, so there are no limited buy or sell orders like on a traditional exchange. When a customer wants to buy bitcoins, they start by sending a SEPA transfer. Unlike other platforms, we do not authorise the deposit of funds in euros prior to the purchase. Once the funds have been sent, the customer can create a purchase order. We keep a permanent stock of bitcoins in inventory, sufficient to execute orders of up to several million euros. As soon as the user confirms their purchase order, we immediately send the bitcoins to their wallet.
From our side, our task is to buy these bitcoins. They may come from other customers selling on our platform, as we have a constant flow of purchases and sales. If an imbalance arises (more buyers than sellers over a short period), we go to the market to buy from our liquidity providers, which may be exchanges or professional services that execute orders on several platforms. Finally, our business model is based on the spread between the price at which we sell Bitcoins and the price at which we buy them back on the market.
How many customers do you have?
We operate mainly in Canada with around 100,000 customers. We have been operating since 2015 and recently extended our presence to Costa Rica in 2023. By the way, to my knowledge, we are the only Bitcoin exchange based in Costa Rica. The average transaction with us is around €30,000, so we specialise in wealthy investors, although we also offer services for individuals with smaller purchases. We also carry out transactions of up to several million euros.
We are in a market segment between platforms for instant purchases of small sums and ETFs for institutional investors. We also have a sizeable percentage of corporates using our services, accounting for around 10-15% of our volume.
Historically, Bull Bitcoin has been used more for selling Bitcoins than buying, with around 65% of transactions selling and 35% buying. This is probably due to the more advanced features we offer for selling, such as the price guarantee on "ZeroConf" transactions. For example, if a user sells Bitcoins when the price goes up, they don't have to wait for the transaction to be confirmed before the price is fixed.
How does your fee structure work?
We have an all-inclusive spread model. There are no deposit, withdrawal or trading fees. Our margin comes exclusively from the spread, which is typically around 2% on the buy and sell side. That said, we are considering lowering this spread in Europe to be more competitive. On our site, buying and selling prices are clearly displayed, just like in a bureau de change.
"Once we are compliant in France, we have a good chance of being compliant at European level" You are present in Canada, Costa Rica and in a few weeks' time in France. Why attack France rather than another market, such as the United States, which is geographically closer?
There are several reasons. Firstly, there's a personal reason: I'm BullBitcoin's sole shareholder, and my decisions are often influenced by my personal needs. I live in Costa Rica, which is why we launched a service there. I'm also of French origin, I spend a lot of time in France, my wife is French and I have a lot of friends and family there. So I wanted a service that I could use when I'm in France.
Then, on a practical level, the arrival of European MiCA regulation weighed in the balance. MiCA standardises compliance requirements in Europe. We could have set up in countries with more flexible regulations, such as Poland or Estonia, but with MiCA, we would have had to comply sooner or later. In France, the regulatory requirements are already very strict, so once we are compliant in France, we have a good chance of being compliant at European level. What's more, the majority of our team is French-speaking, which makes operations easier.
Finally, I've met some exceptional partners in France, such as Théo Mogenet and Gilles Cadignan , who are important figures in the Bitcoin scene in France. This made it easier for us to set up.
You bought an existing French PSAN to set up in France (Bitcoin Lyon). How did the process go with the regulator?
After buying a PSAN, you have to make a declaration to the AMF and submit a lot of administrative documents. It's a very bureaucratic process. Fortunately, we have the same programme of operations as Bitcoin Lyon: we are Bitcoin-only and we don't offer asset custody. We are in the process of validation with the AMF, and the next objective will be to comply with MiCA, so that we can serve all of Europe.
"The best customer service on the planet" The PSAN sector is already crowded in France. How do you intend to distinguish yourself from StakinSat, with whom you share a common vision?
I think that our professionalism, particularly in terms of customer service, sets us apart. In my opinion, we have the best customer service on the planet. We also have an approach based on individual freedom and financial sovereignty. Our technology is developed entirely in-house, so we are not dependent on third parties for our wallet infrastructure. This allows us to offer instant Bitcoin transactions and an extremely reliable service.
Would you consider a merger between Bull Bitcoin and StakinSat in the future?
This is not something we are considering at the moment. We are still in the acquisition phase with Bitcoin Lyon and want to stabilise that operation first. We have our own brand and technology infrastructure, and we don't necessarily need to acquire other companies at the moment. That said, we have global ambitions. Europe is a priority, but we also have projects underway in Mexico and other jurisdictions.
When is the official launch in France?
In about less than a month. Technically, we're ready, but we're still working on SEPA and French KYC compatibility. The platform will be operational for French users within 6 weeks, and the mobile version should be ready by the end of 2024.
How do you apply KYC (Know Your Customer) procedures?
In contrast to other countries where we operate, KYC requirements in France are very strict. KYC must be applied from the very first euro. So there is no way of avoiding this check, even for small amounts. This differs from Canada, for example, where KYC is not required for transactions of less than CAD 1,000. But in France, it is mandatory for all transactions.
"My role is to swallow the pill of bureaucracy to advance the cause of Bitcoin" How do you manage compliance for sales? Do you use blockchain analysis tools to verify the origin of your customers' bitcoins?
Compliance is a crucial aspect and common to all the jurisdictions in which we operate. For customer identification, we use an ID analysis platform. When a customer provides their documents, they go through a platform that analyses them and we keep a copy internally, then we delete the data from the platform. Our analysis partners do not keep the information permanently.
In terms of controlling the provenance of bitcoins, we have had a compliance programme developed for almost ten years. Without going into too much detail, our approach is focused on prevention. If we have any doubts or if a transaction looks suspicious, we contact the customer directly to ask questions. Our aim is to comply with the law while making the integration process as smooth as possible for our users.
In France, there are often tensions between PSANs and banks . Given the name of your company, Bull Bitcoin, this could pose banking problems for your company. How do you envisage this situation?
That's an excellent question, and it's indeed a challenge we've already faced in Canada. Our legal company name is Leonard Inc, while Bull Bitcoin is simply our trade name. This is a way of avoiding potential problems related to the stigma of the name "Bitcoin" with banks.
That said, we have managed to establish solid relationships with several financial institutions, both in Canada and in Europe. It's still too early to mention our banking partners in Europe publicly, but we have four different partners that allow us to operate without any problems. These are financial institutions that specialise in banking for crypto businesses, and most people in the industry know their names (Olky is often a partner of choice for this type of activity, ed. note).
Even in Canada, where banks can sometimes be reluctant to work with crypto businesses, we've managed to build strong relationships with several of them. And because we generate volume and transaction fees for them, these banks are now very happy to work with us.
As a "bitcoiner", don't you find it paradoxical that you have to have such a good relationship with banks, when Bitcoin, at its core, is an alternative to banks?
It is indeed a paradox. If I had to redo my Bitcoin career, I would probably have chosen a different path. Maybe I would have focused on wallets or protocol development, because most of my time today is spent dealing with banks and regulators. As a libertarian and supporter of individual freedom, that's not necessarily what I find most enjoyable.
That said, I figure someone has to do it. I don't pretend to be a martyr, but I see my role as someone who has to 'swallow the pill' of bureaucracy and regulation to advance the cause of Bitcoin. If I didn't do it, others would, but perhaps not with the same principles or ethics as me. So, yes, it's frustrating at times, but the satisfaction of knowing that we're helping thousands of people become sovereign in their Bitcoin management more than makes up for that burden.
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