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The Most Exciting Innovation of the 21st Century?

What do you think has the potential to become the most exciting innovation of the 21st century? Interesting question, isn’t it? Maybe self-driving cars are crossing your mind? Self-conscious robots with artificial intelligence (AI), or a break-through in nano- or biotechnology? It should be something that really advances homo sapiens into a new era, right?

Maybe a new banking technology is not the obvious answer for you? But to an Austrian blockchain startup, it is.

Elena Meissner, Addvalue Global Consulting (Head of ICO Advisory)

After the ICO hype in 2017, we are accustomed to superlative slogans and announcements but this enthusiasm usually comes at the price of credibility. Less is very often more. Even the best idea could severely suffer from unrealistic claims. It’s a thin line between ethusiasm and scam.

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Another ICO, So many “Ifs”, So many Questions

The Austrian MCV-CAP Beteiligung AG announced that it is about to build this planet’s biggest crypto-bank. It doesn’t hold a bank license today, nor any other financial license but it has a promising idea.

An integration of different blockchains with the European SEPA system along with the re-invention of financial products. Under the temporary brand MCV CAP, the company plans to conduct an ICO to finance the announced revolution. Reading MCV CAP’s white paper is a rather demanding job and left us somehow clueless.

The white paper reader learns that

the MCV token is a voucher for the future BCB4U coin. The revenues of the MCV ICO token sale will be used for establishing and capitalizing the BCB4U AG Bank and further development of software and products. One MCV token will equate to four BCB4U coins. The exact BCB4U coin generation date will be determined by the BCB4U bank management after the bank license has been granted.

MCV CAP and BCB4U bank apply for full bank license
MCV CAP will become founder of BCB4U which will apply for bank license

Hmm, so the MCV CAP guys are issuing a ECR20 token (voucher) in their ICO to finance the establishment of a future bank that will apply for a full banking license and will then issue a new cryptographic (banking) coin. According to white paper and website, potential investors can take a full bank license (or ate least an e-banking license) for granted. No further details are announced, it’s obviously a question of “believe it or leave it”. A lot of big things are promised without disclosing the necessary details to make up your mind and seriously consider a possible investment.

Although we believe in the basic MCV CAP idea – the integration of SEPA and blockchain – we have not found the information required to check its validity and the company’s capability to deliver.

Jesus, There are A Lot of Legal Questionmarks

I mean, we all know that nobody can seriously guarantee that a bank license will be granted as long as the financial market authority actually issues the license, right? Given the fast moving regulatory environment in the crypto-space, it’s actually impossible and irresponsible to promise investors that a full bank license will be granted for a crypto-bank. The world’s largest crypto-bank!

MCV CAP and the BCB4U Coin
And what if no bank license will be granted?

Another point is the legal structure and the qualification of the issued MCV token as a voucher for a future crypto-banking coin that may or may not be available at some time in the future. It’s far from sure that a banking coin will actually be approved under any regulatory regime in the SEPA region. On the contrary, it may well be that a “banking coin” will not be deemed compliant with any regulatory framework in the SEPA jurisdictions. And then what? In case a full bank license or e-banking license will not be granted (for whatever reason) and no banking coin can be issued (for whatever reason), what can MCV token holders do then with their tokens?

There are quite a lot of dependencies and ifs:

  • if the ICO is successful the revolutionary banking software will be developed;
  • if the ICO is successful and once the revolutionary banking software will be available an application for a full bank license will be filed
  • if the revolutionary blockchain technology will be available and the corporate framework is compliant the regulators (under which regulatory regime) have to give their “compliance approval” for a bank license
  • if the bank license is granted a new banking coin will be issued
  • if the Once the BCB4U bank license has been granted and the future token may be issued.

Ok, wait a moment. At least we found a little disclaimer on the MCV CAP website stating:

All services and products displayed on this website, white paper, executive summary, and other sources of information can only be used after the successful ICO as well as after the bank license has been issued as well as after the bank products have been implemented.

Maybe, their legal advisors should tell those guys that they will be held legally accountable for their public statements and promises.

MCV CAP ICO Income and business plan
MCV CAP ensures investors a bank license

What is actually offered in the ICO?

In their ICO MCV CAP offers the MCV token (MCV CAP) as a sort of voucher for the future “central banking coin” (BCB4U) In their white paper and executive summary, the company promotes the future coin instead of the MCV token. The MCV CAP (voucher) token is just a means to an end:

The BCB4U coin will be used both as an internal BCB4U bank currency and as a loyalty coin, i.e. cypto-currency transactions as well as debit and credit card payments; millions of smaller and larger cashback transactions will be executed on a daily basis in BCB4U coins for a variety of products (leasing, credit, insurance…).
This will make BCB4U coin the most widely used COIN in the world and increase daily demand.

So, besides their cryptographic MCV voucher, those guys are promoting another (future) coin in their current ICO that may or may not be issued in the future (see the “ifs” above) but they already promote this future coin as the then most widely used coin in the world. That’s insane or at least ridiculous, right?

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Gooood Morning, Crypto! Here’s the Austrian Way!

MCV CAP ICO asking for USD 106 million for many “ifs”

Forget about the Wall Street guys, the London guys, or the Tokyo guys, the Bejing and Hong Kong guys. Those are all amateurs that don’t have a clue to the future of banking. It’s the Austrian ETOXX AG and its founder Egon PUTZI that hold this clue and plan to revolutionize the planet. Who or what is ETOXX AG now? Another name. As a matter of fact, the revolutionary MCV CAP solution is based on the technology of the Austrian ETOXX AG, a cash-back scheme operator. Neither the company nor the technology has yet achieved any merits in the blockchain space. It’s a cash-back system with SEPA integration we understand. That’s state of the art and nothing revolutionary at all.

“We assume that revolutions happen because they are planned. But this supposition is without foundation in reality. Announced revolutions do not happen …. A revolution must overwhelm us as other passions do.” Eugen Rosenstock-Huessy
Out of Revolution

One of our readers wanted to learn more about the blockchain-SEPA integration and the revolutionary system behind MCV CAP. She wrote a nice Email to MCV CAP and received the following answer a few days later:

Thank you for your interest in our project “SEPA meet Crypto”, the merging of the SEPA banking world with the forward-looking digital cryptographic world. Our technical business logic, how we connect the two worlds, I do not want to make publicly accessible. As an analogy, I always like to take Redbull’s Formula One team, which secretly builds their racing car, but which engine is known. Our engine will be based on the project Grid Singularity, the Tobalaba Blockchain, which is also publicly available to a certain degree.

Do you understand the answer? Have you got an idea about the technology? Are you prepared now to invest in the MCV CAP ICO? The answers to these questions are obvious, aren’t they? I mean, the company is going for some USD 106 million and doesn’t want to disclose any technical or conceptual detail. The slogans are the program, it seems. That’s sad, we found.

Preliminary Conclusion

Despite a sound idea this ICO looks and feels a bit scammy and shady. It walks like a scam, talks like a scam, and may finally be a scam – or a very badly managed ICO.

The legal structure with the voucher for future token is hard to understand and in our view an outdated idea. Regulators in most jurisdictions already found that such tokens are actually securities. What if for whatever reason no bank license is granted and no banking coin will be issued? ICO investors and/or MCV CAP token holders are stuck in the investment.

Too many “ifs”, to little information and questionable promises. The overall impression is poor and this is probably the reason for the poor rating the ICO receives on the different ICOrating platforms.

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