That Neil Bergquist would hold the record for the first licensed Bitcoin ATM in the world does not strike me as unusual. This is, after all, the man who organized an official Guinness World record breaking snow ball fight in Seattle on January 12, 2013. It was for charity but since Seattle is not guaranteed snow, in fact rarely gets large dumps of snow, he had arranged for 16 truckloads of the white stuff to be brought in on the day. It was just a blessing that it did not rain, often common for Seattle, and turn his snow to water.
‘Snow Day’ was a fundraiser for the Boys and Girls Club of King County with some 6000 people taking part but it also had a commercial aspect as Bergquist was running a tech incubator at the time and he wanted to show that anything was possible – even a Snow Day in Seattle – or as he said at the time, ‘Make your dreams a reality.’
Later that year he tried to break the world record for the largest water balloon fight but missed the target.
“It’s either win or lose in that business.”
Bergquist has always been interested in social entrepreneurship and creating companies as a vessel for change – but believes for-profits can also be transformational. He sees that companies might have a larger role to play in the capitalistic world we live in. He balances both interests, for example he cites the government library system in the US. Around the same time, he was the Vice President of the Friends of the Seattle Public Library.
“Libraries serve a much bigger purpose than just being able to check out books. They are a safe place. They provide free internet access as well as a lot of classes and curriculum that is free to the community. People can go online and fill in their tax returns or apply for a job. They provide a real service to the community.”
It was just after that, Bergquist first learned about Bitcoin, and used his contacts through the incubator to obtain a first-of-its-kind virtual currency money transmitter license before launching the first licensed Bitcoin ATM.
“We worked hard from the beginning with regulators to gain their trust. We were offering a safe and compliant way for people to buy Bitcoin. It was priced at around $400 at that time and we were giving access to a new technology, a new money, and people were able to benefit from that. We’ve made people hundreds of millions of dollars as a result.
“Once people hold some Bitcoin, then they are more likely to read articles or get into conversations about it. Ownership is the best teacher.”
Despite helping people to make millions, Bergquist sees Bitcoin as being far more than a speculative digital asset.
“It’s this new magic internet money, you know. People are curious about the future of money.”
Coinme began life as a side hustle with Bergquist working nights and weekends, but by mid-2016 it was pretty clear that Bitcoin was going to go on a tear and it was at this stage that he pivoted into raising $1 million in a seed round which closed the following March, subsequently making Coinme his main job.
“This gave us the resources to really pour some fuel on the growth.”
Meeting with state regulators was part of Bergquist’s job. Sometimes he’d try to explain that they needed a virtual currency money transmitter license.
“We started in Washington State, registered Federally with FinCEN and then expanded across different states. We had a lot of green field conversations with state regulators and some threw up their hands and said Bitcoin was not money and so we didn’t need a license.”
An exception was New York with its specific crypto license, its BitLicense, and despite applying for that three years ago, Bergquist is still waiting for approval.
“Aside from New York, we are nationwide with 55 team members, and 40,000 retail locations to buy and sell crypto with cash. We also have a mobile and web wallet where you can buy and sell crypto with a debit card.”
Last year Coinme launched a B2B crypto-as-a-service offering so now there are three legs to the business: ATMs, the web and mobile wallet and finally the B2B service.
Quirky stories follow the ATM side of the business. Obviously, Bitcoin ATM operators don’t want anyone to know they have $100,000 in their backpack, so trips are made at quiet periods.
“In the early days when we did the cash logistics ourselves, when we handed the cash over to the bank teller their reaction was often to say – OMG I’ve never seen so much cash before – and then you’re telling them to keep it down while looking over your shoulder at the queue.
“It also raises timing issues. You can buy Bitcoin instantly but then we have to refill our inventory of Bitcoin at the same time because of the price volatility. Banks can be funny working with cryptocurrency companies, often thinking there is some criminal element to it.”
Coinme does KYC (Know Your Customer) checks on all of its customers and its team monitors the blockchain for suspicious activity, and can block any suspicious activity.
“We have a full-time compliance team. But if you are going to do something malicious, it’s probably not a good idea to do it with a licensed and regulated financial services company. With blockchain there is transparency, with fiat or cash very little.”
Moving towards mass adoption, Bergquist feels Coinme is helping that journey. His mantra is a trinity of accessibility, ease of use and understandability.
“Back in 2014, we helped bring trusted access to bitcoin for people in the Seattle area. Today we have a Coinme location within five miles for more than 90% of the American population. Now we are really focused on education which is where cryptoliteracy.org comes in.
“The next big piece of the puzzle is user experience. For example, people still struggle with self-custody – even in a year where so many centralized exchanges went under. The reality is that you need to keep it very simple while giving people the choice of currency they want to use. It’s a core piece of borderless money and while we are focused on America now, we want to provide these services internationally.
“The vision is that money can be sent as easily as an email and the recipient is not subject to the hyperinflation of their native fiat currency as is the case in many countries. We are a long way from the vision of the Bitcoin whitepaper -released in 2008 – but we are working on it.”
Follow this space to find out more about Neil Bergquist and his passion for making things better. And maybe bring a snowball or two just in case.
