RE: Bitlicense application summary

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Hi Michael,

=
 

Sorry for the late response. We w=
ere very busy with tax preparations. I will start sending you the paperwork=
for NY license next week.

Meantime, I was wonderi=
ng if it is possible to send something else over to you. I have prepared Te=
rms and Conditions that we need to upload into the ATMs, I combined some te=
rms and conditions from other companies and changed few things that pertain=
to our company. Can I send it over to you for review?

 

Thank you!

Elena

From: Michael Pierson
Sent: Monday, March 12=
, 2018 6:18 PM
To: Elena Be=
lyayeva; Elena Belyayeva; ‘wael@belcobtm.com’
Cc: Chris Schultz
Sub=
ject:
Re: Bitlicense application summary

=
 

Elena,

 

I hope you are doing wel=
l. This is a quick note to see whether you have any questions about the inf=
ormation needed for your BitLicense Application. Please let me know if I ma=
y be of assistance to you.

 

Best regards,

Michael

 

 

A. Michael Piers=
on

Partner

 

FisherBroyles, LLP

445 Park Avenue | New York, NY=
10022 | USA

Mobile: +1.20=
2.445.3779 | michael.pierson@fisherbroyles.com | fisherbroyles.com | https://www.fisher=
broyles.com/michael-pierson/

 

 

Atlanta | Austin | Boston | Charlotte | Chicago | Cincinna=
ti | Cleveland | Columbus | Dallas | Denver | Detroit | Houston | Los Angel=
es | Naples | New York | Palo Alto | Philadelphia | Princeton | Salt L=
ake City | Seattle | Washington, DC

 

The information contained in this e-m=
ail message is only for the personal and confidential use of the intended r=
ecipient(s). If you have received this communication in error, please notif=
y us immediately by e-mail, and delete the original message.

=

 

 

 

From: Michael Pierson <Michael.Pierso=
n@fisherbroyles.com>
Date: Friday, February 23, 2018 at 9:19 A=
M
To: Elena Belyayeva <elena@belcobtm.com>, Elena Belyayeva=
<belcobtm@gmail.com>, "’wael@belcobtm.com’" <wael@belco=
btm.com>
Cc: Chris Schultz <Chris.Schultz@fisherbroyles.com=
>
Subject: Bitlicense application summary

 

Elena and Wael,

In preparation for our call, below is a summary of the info=
rmation required by the New York Department of Financial Services for your =
Application for a License to Engage in Virtual Currency Business Activity. =
A substantial amount of information is required, and I am here to guide you=
through the process, so please let me know if you have any questions about=
the information listed below:

Information Regarding Corporate Matters

Articles of Incorpo=
ration (or equivalent documentation if the applicant is not a corporation) =

A copy of the =
applicant=E2=80=99s By-Laws, certified as current and accurate by the corpo=
rate secretary, or equivalent documentation if the applicant is not a corpo=
ration.

Foreig=
n entities must submit a copy of their Application for Authority and Foreig=
n Bid Certificate, certified by the Secretary of State of New York, as proo=
f of their qualification to do business in this State.

Provide the name, mailing address,=
telephone number and facsimile telephone number for: (a) the applicant=E2=
=80=99s head office; (b) the office where applicant=E2=80=99s books and rec=
ords are kept; and (c) each subsidiary or affiliated company engaged in Vir=
tual Currency Business Activity.

Provide the name and title of: (a) the individual to who=
m all communications from the Department should be addressed; and (b) the i=
ndividual to whom all consumer inquiries and complaints should be addressed=
.

In the case =
of any Person who has made a commitment to extend credit to the applicant a=
nd such commitment is outstanding, identify such Person(s) and the terms of=
the commitment(s).

Provide a list of all of the applicant=E2=80=99s Affiliates and an or=
ganization chart illustrating the relationship among the applicant and such=
Affiliates;

P=
rovide a verification from the New York State Department of Taxation and Fi=
nance that the applicant is compliant with all New York State tax obligatio=
ns.

Fees=

A non=
-refundable check, payable to the order of the Superintendent of Financial =
Services, for the $5,000 application fee must be sent with each new license=
application.

=
Information Regarding History and Business

A description of the proposed, c=
urrent, and historical business of the applicant and all Affiliates, includ=
ing detail on the products and services provided and to be provided, all as=
sociated website addresses, the jurisdictions in which the applicant and it=
s Affiliates are engaged in business, the principal place of business, the =
primary market of operation, the projected customer base, any specific mark=
eting targets, and the physical address of any operation in New York.

If the applicant or=
its Affiliates have been or currently are engaged in Virtual Currency Busi=
ness Activity without first obtaining a license to do so from the Superinte=
ndent, provide details as to: (a) the length of time engaged in such activi=
ty; (b) the amount and number of virtual currency transactions transmitted,=
exchanged, or held; and (c) the reason for not obtaining a license.

Provide a list of th=
e jurisdictions in which the applicant is licensed or otherwise authorized =
to engage in virtual currency-related activity, money transmission, or othe=
r financial services activity and the amount of any bond or deposit furnish=
ed in each such jurisdiction. In each case, please also specify the type of=
activity for which the applicant is licensed or otherwise authorized.

List all jurisdict=
ions, both domestic and foreign, in which the applicant or any Affiliate of=
the applicant has applied for a license or other authorization to engage i=
n virtual currency-related activity, money transmission, or other financial=
services activity and has not been issued such license or authorization. S=
tate the reason(s) provided for why such license or authorization was not o=
r has not yet been issued.

List all jurisdictions, both domestic and foreign, in which th=
e license or other authorization of the applicant or its Affiliate to engag=
e in virtual currency-related activity, money transmission, or other financ=
ial services was revoked, suspended, or refused renewal. State the reason(s=
) provided for why the revocation, suspension, or refusal occurred.
=

Indicate whether the =
applicant or any Affiliate of the applicant has ever been the subject of a =
regulatory or enforcement action in any jurisdiction. If answered in the af=
firmative, describe the nature, and outcome, of all such regulatory or enfo=
rcement action(s).

Provide, as applicable, a copy of any insurance policies maintained fo=
r the benefit of the applicant, its directors or officers, or its customers=
.

Inform=
ation Regarding Directors, Principal Officers, Principal Stockholders and P=
rincipal Beneficiaries

Provide a list of, and detailed biographical information f=
or, each individual applicant and each director, Principal Officer, Princip=
al Stockholder, and Principal Beneficiary of the applicant, as applicable, =
including such individual=E2=80=99s name, citizenship, title, social securi=
ty number or alien identification number, as applicable, and physical and m=
ailing addresses.

Describe the amount and type of equity interests of the applicant owned=
by each Director, Principal Officer, Principal Stockholder, and Principal =
Beneficiary. Complete a sworn statement of ownership form for the applicant=
.

For each Pri=
ncipal Stockholder and Principal Beneficiary who is a natural Person, and e=
ach director and Principal Officer, describe all material occupations, posi=
tions, offices or employment during the preceding 15 years. Include: (a) th=
e name, address, and principal activities of any business, corporation, or =
other entity in which each occupation, position, office or employment was c=
arried on; (b) the starting and ending dates of each; and (c) a statement a=
s to whether within such period s/he was discharged from such occupation, p=
osition, office or employment and, if so, for what reason. Such information=
must be accompanied by a form of authority, executed by such individual, t=
o release information to the Department

In the case any Person other than a natural Perso=
n is a Principal Stockholder or Principal Beneficiary of the applicant, pro=
vide the name, address, and date and place of incorporation or organization=
of any such Person. Also provide an organization chart to show the benefic=
ial ownership relationship between the parties.

Describe the amount and type of equity =
interests of applicant, owned, either directly or indirectly through owners=
hip of another entity, by any such Person or the Person=E2=80=99s associate=
s.

Indicate wh=
ether any director, Principal Officer, Principal Stockholder, or Principal =
Beneficiary of the applicant ever applied for a license or other authorizat=
ion, in this State or otherwise, to engage in virtual currency-related acti=
vity, money transmission, or other financial services activity. If answered=
in the affirmative, state whether such license was granted. If granted, st=
ate whether such license was ever suspended, revoked, or refused renewal.

Provide an orga=
nization chart, including the applicant and all Affiliates. Indicate Princi=
pal Stockholders and Principal Beneficiaries.

Information Regarding Operations =

List the j=
urisdictions in which the applicant proposes to operate. If applicable, lis=
t the locations in other countries in which the applicant proposes to engag=
e in virtual currency- related activities. List any other virtual currency,=
money transmitter, or other entities routinely used to facilitate transact=
ions.

Provide =
an organization chart of the applicant and its management structure, includ=
ing its Principal Officers or senior management, indicating lines of author=
ity and the allocation of duties among its principal officers or senior man=
agement.

Descr=
ibe, in detail, the proposed operations for conducting the Virtual Currency=
Business Activity. This description should include information on the staf=
fing and internal organization of the applicant, its systems and procedures=
, and details of all banking arrangements. Include letters from bank compli=
ance officers that the bank is aware that the applicant=E2=80=99s accounts =
are being used to facilitate virtual currency-related activity.

=

Provide an explanation of=
the methodology used to calculate the value of virtual currency in fiat cu=
rrency.

Provid=
e a specimen form of all agreements, documents, receipts, disclosures, and =
contracts that the applicant plans to issue or use with customers in this S=
tate.

Provide =
a flow of funds narrative, including a flow chart, specifying all flows of =
funds that will occur in the normal operation of the applicant. Specify who=
directs the flow and how it is done; the name and address of each entity t=
he funds flow through; the title of each account; ownership or control of t=
he accounts and addresses and who or what entity is liable for the funds at=
all points.

Information Regarding Other Agreements

Provide copies of any other agreement=
s the applicant has entered into (or will enter into) in anticipation of Vi=
rtual Currency Business Activity.

Information Regarding Legal Proceedings

Describe (a) an=
y criminal action brought against the applicant or any director, Principal =
Officer, Principal Stockholder or Principal Beneficiary of the applicant; (=
b) any civil action brought against the applicant or any director, Principa=
l Officer, Principal Stockholder or Principal Beneficiary of the applicant =
(excluding any civil action in which the amount in controversy was less tha=
n $25,000 or which terminated more than 15 years prior to submission of thi=
s application); and (c) any proceeding brought to declare the applicant, or=
any director, Principal Officer, Principal Stockholder or Principal Benefi=
ciary of the applicant, bankrupt and the disposition of such action or proc=
eeding.

=
Information Regarding Financial Statements

Provide a current audited financial st=
atement for the applicant prepared by an independent certified public accou=
ntant and a projected balance sheet and income statement for the following =
year of the applicant=E2=80=99s operation. The projected balance sheet and =
income statement must include the assumptions used in making the projection=
s. If audited financial statements are unavailable, include an explanation =
of why. If the applicant=E2=80=99s fiscal year ends more than 60 days prior=
to the date of application, provide a supplemental financial statement for=
a period ending not more than 60 days prior to the date of application (wh=
ich may be prepared by applicant). All financial statements must include a =
balance sheet, profit and loss statement, and a statement of retained earni=
ngs. Where the applicant has wholly owned subsidiaries, financial statement=
s for applicant alone, as well as consolidated financial statements, must b=
e filed. Any exhibited losses must be explained and a projected date for th=
e return to or achieving profitability must be included.

Applicants that are not able to =
provide current financial statements must provide a pro forma balance sheet=
and profit and loss statement. Include retained earnings for the business =
as of the close of each of the first two years of operation. Include the as=
sumptions used in making the projections. Any projected losses must be expl=
ained and an estimate of time to achieve profitability should be given.

Financial stateme=
nts of foreign-owned applicants must be presented in both the applicable fo=
reign currency and in United States Dollars. The date and basis of conversi=
on must be stated.

Complete the enclosed Personal Financial Statement for each director, =
Principal Officer, Principal Stockholder and Principal Beneficiary of the a=
pplicant. Alternatively, a different format may be used provided it contain=
s substantially similar information; but in either case the statement must =
be dated and certified as complete and correct by the party submitting it. =

Provide audite=
d financial statements for the most recent two fiscal years of any Person, =
other than a natural person, which directly or indirectly owns 10% or more =
of the equity interests of the applicant. Such financial statements must in=
clude a balance sheet, profit and loss statement, and a statement of retain=
ed earnings. Any exhibited losses must be explained and a projected date fo=
r the return to or achieving profitability must be included.

=
Required Affidavits

Provide =
affidavits describing any pending or threatened administrative, civil, or c=
riminal action, litigation, or proceeding before any governmental agency, c=
ourt, or arbitration tribunal against the applicant or any of its directors=
, Principal Officers, Principal Stockholders, and Principal Beneficiaries, =
as applicable, including the names of the parties, the nature of the procee=
ding, and the current status of the proceeding.

Anti-Money Laundering (BSA/AML)

Provide=
written BSA/AML policies and procedures that meet the requirements set for=
th in 23 NYCRR 200.15, including the applicant=E2=80=99s risk assessment.

Identify the in=
dividual or individuals who will be responsible for coordinating and monito=
ring day-to-day compliance with the applicant=E2=80=99s anti-money launderi=
ng program and provide background information and materials demonstrating t=
hat the identified individual(s) is qualified to carry out such functions. =

Surety B=
ond or Trust Account

Indicate how the applicant proposes to comply with the requi=
rements of 23 NYCRR 200.9(a), including the general manner, the proposed am=
ount of the bond or trust account, and why the applicant believes such an a=
mount is sufficient for the protection of customers.

To the extent the applicant purposes=
to use a trust account, identify the qualified custodian at which the acco=
unt will be maintained.

Fingerprints

Applicants must provide, for each individual applica=
nt; for each Principal Officer, Principal Stockholder, and Principal Benefi=
ciary of the applicant, as applicable; and for all individuals to be employ=
ed by the applicant who have access to any customer funds, whether denomina=
ted in fiat currency or virtual currency:

i. a set of completed fingerprints, or a receip=
t indicating the vendor at which, and the date when, the fingerprints were =
taken, for submission to the State Division of Criminal Justice Services an=
d the Federal Bureau of Investigation; and

ii. two portrait-style photographs of each suc=
h individual measuring not more than two inches by two inches.

iii. fingerprints must be =
submitted according to the procedures available on our website at http://ww=
w.dfs.ny.gov/banking/iafpplfs.htm.

Background Investigation Reports =

Provide an investigat=
ive background report prepared by an independent investigatory agency for e=
ach individual applicant, and each Principal Officer, Principal Stockholder=
, and Principal Beneficiary of the applicant, as applicable. It is the resp=
onsibility of the applicant (and its, Principal Officers, Principal Stockho=
lders, and Principal Beneficiaries, as applicable) to order such reports at=
their own expense, from an independent licensed private investigation comp=
any.

All backg=
round investigation reports must be provided directly to the Department by =
the licensed private investigation company. Note that the failure to prompt=
ly order the reports may delay application processing.

The following list specifies infor=
mation that must be included in a submitted background report. No backgroun=
d report will be considered complete unless all the information requested b=
elow is included in the investigation report.

i. Comprehensive credit report/history (inc=
lude the actual report as well as summary).

ii. Civil Court and Bankruptcy Court records =
for the past 10 years. Include federal, state, and local courts. Such repor=
ts shall contain, at a minimum, court dates from courts located in counties=
in which the applicant both worked and resided and all counties contiguous=
to those counties.

iii. Criminal records, including felonies, misdemeanors, and viol=
ations. Include federal, state, and local courts. Such reports shall contai=
n, at a minimum, court dates from courts located in counties in which the a=
pplicant worked and/or resided and all counties contiguous to those countie=
s.

iv. Education records.=

v. Employm=
ent history.

vi. Personal and professional references (a=
t least three of each, excluding relatives), which must be furnished in wri=
ting.

vii. Media history, if applicable (include elec=
tronic search of national and local newspapers, wire services, and business=
publications).

viii. Regulatory history, if applicable=
(HUD, FREDDIE MAC, State Regulators, OCC, FINRA, etc.).

ix. Department of Motor Vehicles records.

x. All judg=
ments and liens filed with the county clerk (within the past ten years). Su=
ch reports shall contain, at a minimum, information on judgments and liens =
filed with the county clerk in counties where the applicant worked and resi=
ded and all counties contiguous to those counties.

xi. =
Licenses granted by any governmental agency or judicial body (indicate if t=
hey are still in good standing).

xii. Listing of all cr=
edit relationships by the applicant (such as revolving credit and establish=
ed credit facilities) and indication of any credit extensions, including lo=
ans, on which the applicant is in default (more than 90 days past due).

FinCEN Registration

To the extent applicable, the applicant is requir=
ed to submit evidence that it has registered with FinCEN as a Money Service=
Business. A copy of FinCEN=E2=80=99s confirmation or acknowledgment letter=
will be sufficient. If the applicant believes it is not required to regist=
er with FinCEN, the applicant must provide an explanation and supporting do=
cumentation for that conclusion.

Written Policies and Procedures

Provide copies of all written p=
olicies and procedures required by, or related to, the requirements of 23 N=
YCRR 200, including but not limited to policies and procedures addressing: =

compliance; anti-fraud; =
cyber security;
privacy a=
nd information security;
busi=
ness continuity and disaster recovery;
complaints and complaint resolution.

=
Miscellaneous

Provide the name, address, telephone number and facsimile telephone=
number of applicant=E2=80=99s counsel and independent certified public acc=
ountant, to the extent applicable.

ENCLOSURES

As ap=
plicable, the following individual forms must be filled out by the applican=
t and submitted with the application:
=

=C2=B7  Authority to Release Information

=C2=B7  Background Report Certification

=C2=B7  Personal Financial Statement

=C2=B7  Litigation Affidavit =E2=80=
=93 Individual

=C2=
=B7
 Liti=
gation Affidavit =E2=80=93 Licensee/Applicant

=C2=B7  Questionnaire

=C2=B7  Statement of Ownership

=C2=B7  Taxpayer ID

A. Mic=
hael Pierson

Partner

 

FisherBroyles, L=
LP

445 Park Avenue | New York, =
NY 10022 | USA
=

Mobile: +1.202.445.3=
779 |
michael.pierson@fishe=
rbroyles.com
| fisherbroyles.com | https://w=
ww.fisherbroyles.com/michael-pierson/

 

 

Atlanta | Austin | Bos=
ton | Charlotte | Chicago | Cincinnati | Cleveland | Columbus | Dallas | De=
nver | Detroit | Houston | Los Angeles | Naples | New York | Palo Alto | Ph=
iladelphia | Princeton | Salt Lake City | Seattle | Washington, DC

 

The i=
nformation contained in this e-mail message is only for the personal and co=
nfidential use of the intended recipient(s). If you have received this comm=
unication in error, please notify us immediately by e-mail, and delete the =
original message.

 

 

=