London — March 17, 2020 – Nebeus, a leading U.K. fintech services company, has been cleared of all charges in a precedent-setting client dispute that will have a lasting impact on the U.K. legal system, defining crypto-currency, its storage and wallets in U.K. legal terms, and developing a mechanism for executing a freeze order when it comes to digital money.
A financial services company, Nebeus enables crypto-loans and remittances in 100 countries. Nebeus helps individuals and companies remit a variety of crypto-currencies across national borders, and to execute merchant and business account payments using digital money.
Nebeus, with its financial operations based in London and lending operations based in Barcelona, and is self-regulating in that it voluntarily follows banking industry-standard AML and KYC guidelines, self-policing its transactions for fraud and suspicious origin of funds.
“Nebeus has been founded with the intent to grow it into a full-fledged financial services institution, fully regulated, thus pre-empting digital money financial services regulation as it catches up with fintech’s breakneck development,” said Sergey Romanovsky, Nebeus founder and CEO.
The facts of the case are as follows:
- In late 2018, of millions in USD equivalent were deposited with Nebeus by a new client. Red flags were raised immediately as the client used his wife’s name to open the account, and refused to submit to KYC with his U.S. credentials.
- For source of funds, the client listed a crypto-account, which held digital money associated with a business that has been classified in the U.S. as a fraudulent Ponzi scheme and triggered a criminal investigation in Poland.
- Shortly thereafter the client’s partner sent Nebeus’ customer service team a demand letter, claiming that the deposited finds were stolen from their joint business.
- A background check into the client revealed that he was involved in several lawsuits in the U.S., accusing him of misappropriating investors’ funds.
- Having registered all these red flags, Nebeus moved the funds from the client’s account into cold storage and notified the National Crime Agency.
Being a model corporate citizen, Nebeus has set a number of legal precedents by enabling the U.K. legal system to find answers and solutions for modern-day digital finance challenges. Nebeus did so by fully cooperating, and consulting with the U.K. authorities in this case.
The legal case:
- Upon having funds locked in cold storage by Nebeus because of registering multiple irregularities, the client sued Nebeus. A court date was set.
- At the hearing, the judge asked Nebeus to verify that the funds in question were secure. Nebeus offered evidence that the funds were in its possession, in cold storage on Nebeus’ servers.
- The judge ordered a stay in the case, requiring time to ascertain the facts of the case and to assess the technology involved. The judge issued a freeze order.
- While there was no procedure offered by the court to execute the freeze order, Nebeus offered its own methodology, which was accepted by the Crown. Funds in question were put on an external cold storage drive and were submitted to an agreed-upon third party for safekeeping.
As a result of these actions, Nebeus resolved the dispute, proving that it acted legally and responsibly. KYC/AML procedures are now standard for U.K. and EU financial service digital money firms.
“We believe that by self-policing Nebeus helped U.K. legal system and set a number of important legal precedents,” said Sergey Grachev, founding partner, MGAP Attorneys at Law. “MGAP is happy to assist firms like Nebeus to chart the correct course in the industry where the pace of technology development outstrips legal evolution, and self-policing and self-regulation is not just a good business practice, but a competitive requirement.”
Founded in 2014, Nebeus is a London-based fintech platform utilized for the consumption and creation of financial services and products. Nebeus provides instant loans in bitcoins, serves as a P2P exchange platform, features a user-friendly bitcoin wallet, and issues a crypto-backed loan. The Nebeus platform was first developed with the goal of delivering a convenient, low-cost, and highly efficient service that meets the demands and challenges of the ever-evolving cryptocurrency-to-fiat market. Nebeus’ ultimate vision is to continue building its financial ecosystem. For more information, please visit www.nebeus.com
For more information please contact Nebeus legal team:
MGAP Attorneys at Law
+1 732 490 5148