Cognis Simon Grunfeld on FDIC Insured Crypto App

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The FinanceFeeds podcast is back for its 15th episode with our Editor-in-Chief Nikolai Isayev exchanging ideas with Simon Grunfeld, Cogni’s Head of Web3.

Simon Grunfeld is well known in the FX industry as the founder of Gallant FX, a global leader PaaS of Forex trading technology serving retail and institutional clients. He left the FX business in 2010 when the Dodd-Frank bill was introduced and put into effect in the United States.

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He then ventured into the world of digital assets, first as a founder of OTC crypto solutions for five years before joining blockchain pioneer Apifiny, which was the first platform to tokenize real-world assets (RWA) and doing something with collectibles even before NFT.

During the COVID-19 shutdowns, he worked as a senior consultant for the NFT platform, VeVe, and served as VP of Crypto at SIMBA Chain earlier this year to help them issue tokens. and file a patent for a show that complies with US law. .

It was in July 2022 that Simon Grunfeld was named Head of Web3 at Cogni, the New York-based digital bank that provides easy access to Web2 and Web3 services in traditional finance, crypto, NFTS, games and metaverse.

Cogni responds to fears in the aftermath of the crypto winter

The phrase bridging the gap was the first topic to come up as Grunfeld pointed to the huge wave of the assertion frequently used by companies within the ecosystem – What exactly are you bridging? – and the lack of problem solving. Sounds really good in theory, but in practice you’re causing more problems than you had in the first place.

Cogni, on the other hand, is really tackling a problem faced by the millions of crypto users who stay up at night for fear that their centralized platforms may be next in the series of bankruptcies affecting the space. digital assets and not being able to withdraw their hard-earned money or digital assets.

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The words not your keys, not your crypto are taken to heart at Cogni. We are bridging the gap between Web2 and Web3 from a banking perspective in the sense that Cogni is rolling out the first-ever noncustodial crypto wallet and banking app, Grunfeld said. It’s part of your banking experience to hold the crypto, send and receive the crypto to your wallet, where you – not Cogni – but you, the user, own the keys. If you don’t like our app for any reason, take those keys to another wallet. We have no control over this.

We don’t need users to trust us

Which makes Cogni completely different from all the platforms that have gone – FTX, Voyager, Celsius Network, etc. – is that every dollar deposited by users is insured by the FDIC. This can only be done with a banking license.

We don’t need users to trust us because you are in complete control of your crypto and your fiat deposits are FDIC insured, he continued. If we decide tomorrow to go bankrupt for whatever reason, you will get your money back and your assets will be yours to move where you want to move them.

It’s a real bridge between Web2 and Web3: the security you have with the FDIC and the knowledge that we can’t hold your crypto. It’s yours and yours alone.

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The lifestyle-focused digital banking platform has already undergone the first phase of product launch and is currently preparing for phase 2, which will be rolled out in the second quarter of 2023 to expand support for a number of blockchain EVMs. , including Bitcoin, Ethereum and Solana.

CeFi platforms offer non-deliverable products like CFDs. Cogni Delivers Crypto

Cogni and its FDIC-assured banking app are a completely different ball game from centralized platforms. A key difference is that CeFi products are non-deliverable digital assets – much like contracts for difference (CFDs) – meaning there is no delivery of crypto assets. In other words, if they collapse, good luck!, he reiterated. If you’re buying through Cogni, it’s up to you. It does not belong to us.

Grunfeld also pointed to a unique solution on the fiat side of the operation. Show me a platform that provides FDIC support for filings. There is only one that I know of. No one else can and for good reason. They speculate with your funds. We don’t do that. Were a banking platform, he explained, reminding Nikolai that he has worked extensively with centralized platforms and understands the loopholes platform providers use to manipulate their users. Cogni, however, has taken an approach where it doesn’t need user trust. We don’t have access to your money.

Lifestyle, carbon footprint, sports

Cognis’ unique value proposition doesn’t stop at non-custodial crypto services with FDIC-insured deposits. The platform provides tools and utilities that make life interesting and also raises carbon awareness by helping users understand the carbon footprint associated with their daily spending. Carbon credits are however not on the roadmap due to trust issues. Until regulators start to act, anyone can easily set up a carbon credit store and fraudulently claim they are providing real carbon credits, he admitted. I’m not saying they are all scammers, but there are a lot of scammers. As a side note, he recalled that the crypto ecosystem has been a pioneer in the green transition. Ethereums is moving from Proof of Work (PoW) to Proof of Stake (PoS), which has dramatically reduced overhead by 99%, is a solid example of this.

As for its lifestyle vocation, Cogni has already attracted the interest of major brands and brought them into its ecosystem so that they can create NFT drops for users and build communities with exclusive access and experiences.

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An example of this is a partnership with college sports platform, Campus Legends, in an effort to meet the needs of college athletes looking to grow their fan base ahead of a potential big league professional career.

Cogni holds the future KYC standard for Web3 companies

Grunfeld is waiting for the rules and regulations to settle. Once they do, the days of laissez-faire in the crypto space will be over, KYC/AML requirements will be everywhere, and businesses will face a critical problem: How do I verify users?

Cogni has the solution: the Passport – a KYC standard that links the finesse of Web2 KYC to the portability of Web3.

Passport caters to businesses that need to know who they are talking to in the complex world of Web3 and in a compliant way. So how can this be done? The more you use your wallet, the more I can learn about your interactions, he said, pointing to new platforms that work like a VPN or proxy. which can record interactions and build the user’s profile, thus enabling Web3 companies to better respond to users.

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So what makes Cogni different? When you open an account with us, you are effectively opening a bank account, he said, adding that the platform tracks user behavior via a non-transferable token – also known as a linked token. soul – which cannot be removed from the wallet.

This token allows Web3 platforms to confirm that a certain wallet is trusted by Cogni. And if they need a copy of that information, they can extract it using the Cogni KYC standard. The information is encrypted and put on the chain, instead of being kept in a centralized database. This guarantees protection in the event of a security breach.

The interview with Simon Grunfeld also covered how his passion for New York Yankees hats nearly got him in trouble at a restaurant in Boston, as well as the international incident that is FTX’s collapse and the lessons that were drawn from it, which still boils down to a completely hands-off model situation that tracks the currency not your keys, not your crypto.

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