Nestor Dubnevych, an attorney-at-law, has attained substantial success in his industry. With more than 5 years of experience, Nestor specializes in providing legal due diligence to tech companies, while his utmost interest lies in offering legal advice to the emerging projects based on blockchain, assets regulation, fintech consulting, and fundraising compliance. At present, he is the co-founder of the recognized and acclaimed startup, Legal Nodes. Aside from leading his startup, he is also a member of the group working towards virtual currency legislation in Ukraine. In addition, Nestor Dubnevych holds the position of co-founder at Kyiv Legal Hackers - a global Legal Tech movement.
What do you think is going on in the cryptographic industry right now? How do you see the future of it?
It is definitely maturing. In the year 2018, we saw the rapid rise and burst of ICO projects, the year 2019 has been a major constructive step towards blockchain mass adoption and rising infrastructure. And for the right reasons! The principles behind blockchain have a very lasting and strong impact.
Blockchain and cryptography allow us to place our trust in computers and machines instead of on centralized organizations, who have always kept us in the dark. It basically solves middlemen problems by removing the trust factor entirely in the payment process as well as data transfer and ownership.
See, we know that technology is revolutionizing our world. We literally have everything on our smart devices now. The Internet of Things has allowed us to operate everything right from our fingertips. Whether it is ordering groceries online or switching on the air conditioner even before we reach our homes. But the internet has brought its own set of issues and concerns. It has become unsafe, unsecured and has absolutely no regard for our privacy. This is where cryptography and blockchain fit right in! Blockchain technology allows us to make our exposed worlds much safer and secured.
Furthermore, people, governments around the world, top-notch organizations have now started realizing this. Whether it is governments around the World experimenting with National currencies or organizations investing heavily in blockchain in all different spheres- banking, healthcare, voting, real estate- the ripples of this technology are felt all over.
Moving towards the future of the cryptographic and blockchain sphere- the number of projects currently being explored in this space is substantial. Even if we follow crypto trends in 2019, we see a relative increase in ‘Crypto Adoption’. The concept of stable coins in cryptocurrencies is quickly gaining momentum. The businesses accepting cryptocurrency payments have increased significantly. Organizations, in addition to the new models of exchanges, are also quickly lining up. I recently came across this Crypto Processing and wallet Coinspaid, which allows you to conduct your business using reliable cryptocurrency processing methods. My point is, that judging by the current scenario for cryptocurrencies and blockchain, this space is filled with immense potential.
In our future, we are going to live with machines and devices which are going to have a foot inside each part of our lives. From our private data to our financial transactions. We need blockchain solutions like cryptography to make our futures more secure. Blockchain is definitely the golden key behind our futures in human advancement.
What do you think of Facebook's cryptocurrency, Libra?
That seems to be the question of the hour, right! See, Libra has definitely bought a new wave to the cryptocurrency paradigm. The word cryptocurrency does not seem odd now. It is exciting. The Libra project is backed by organizations such as Uber, Mastercard, PayPal, etc. You don’t see every day when the top companies in the world are creating a project together.
The way I look at Libra is that it is a major step towards the adoption of cryptocurrencies and blockchain projects. Facebook has already entered this space of blockchain. Other major players like Amazon and Apple are also in the process of coming up with blockchain and crypto projects. When such corporations develop proposals and give attention to new technology, the adoption rate automatically increases.
Another point that I would make about Libra is that it is a stable coin. The year 2019, saw a swing towards the rise in stable coins. Libra, being one of them, also gives stable coins a new dimension. Moreover, I also feel that cryptocurrencies including Libra should be looked as a step towards a more connected global financial system. Digital currencies backed by blockchain are a great approach towards building a more accessible and integrated financial ecosystem. They can be a game-changer for the billion-dollar worth of cross border remittance industry. Furthermore, they can also be used to bring the 2 billion unbanked population of the World under a financial platform.
With the governments around the globe eyeing the Libra project, I am sure it has a long way ahead in its journey. But, one thing is for sure; that with projects like Libra, the days of having National currencies based on blockchain technology or stable coins approved by governments aren’t very far.
What are the three characteristics a project must have to raise the amount of money necessary for ICO/IEO? What technological solutions will be in particular demand in the near future?
The first characteristic for an ICO to be successful is portraying a clear idea of the project. The whitepaper should have clear objectives and goals lining up for the ICO/IEO. It should have a clear roadmap entailing the practical approach to deliver the objectives. A strong and synergized team at the backbone of the ICO/ IEO, who believe in the project is equally important for its success. A team of skilled professionals who have the potential to see the project through and deliver on the promises made is equally paramount.
The second one is, of course, the legal aspect of the project. At present, the cryptocurrency and blockchain field is quite dynamic. Even if you are doing an ICO, you need to ensure that it is structured properly. A key point to note in this sphere specifically is that each jurisdiction in different countries today have varying regulatory compliances for ICO/ IEO projects. It is extremely important to choose the correct jurisdiction for the future scope of the project. As far as legal matters go, it is also vital to see if all the correct disclaimers, as well as the privacy policies, are in place. Primarily, this is for two main reasons. The first one is that it creates a sense of trust between the investors, clients, and founders of the project if all the legal terms are clearly defined. The second one is to retain the acquisition value of a business during its exit. Almost 15 - 25% - the average percentages by which the acquisition value of business gets reduced before exit due to lack of proper due diligence.This is one of the things which we are trying to accomplish by offering Legal Nodes to blockchain and other tech companies. We conduct thorough due diligence for the project, develop all the needed agreements required, define obligations for the company, and also develop AML/ KYC policies.
Another characteristic is the marketing aspect of the ICO/ IEO. It is equally necessary to bring your ICO/ IEO project out there on various platforms. This includes international conferences, hosting meetups, spreading it on media websites and papers, as well as highlighting on social media platforms. It is crucial that your marketing plan inspires trust among investors. Since many ICO’s have been a scam in the past, investors have grown extremely vary. It is necessary to express the benefits your investor will get, how your token will be listed, on which exchanges, and also guarantees behind your ICO/ IEO.
As far as technological trends for the future are concerned, we are at the brink of a major technological revolution. Technologies such as Artificial Intelligence (A.I), machine learning, data analytics, Internet of Things (IoT) and Blockchain are gaining rapid momentum. These technologies will not only change the way the whole world works but will also have a significant impact on an individual’s daily lives. Such disrupting technologies are at the frontier- the driving force of a value-based future world.
What is the main advice you can give to technology startups, besides addressing legal issues?
There are a lot many things which go behind the curtain of a startup’s and this constitutes equally for victory as well as losses.
Start with a small market. This will allow you to gain expertise for your startup before moving onto bigger markets. It is important that you find the right people who share the same vision as you do. Building a strong personal reputation and connections will help in accelerating the development of your project. Even if your product is par excellence, without sales and marketing, it cannot be a profitable venture. Sales and marketing are the two pillars of your startup. Research the market thoroughly and build an effective and viable marketing plan.
Lastly, enjoy the whole process of building it from ground zero. Will it be easy? No. You are bound to have multiple failures. But don’t give up. Stand up and start again. Most of all, enjoy the journey!
Which modern exchanges do/would you trade on?
Cryptocurrency exchanges are the only medium available for people to buy or try their hands-on cryptocurrencies. In the past few years, many of these exchanges have had a tough ride for them. From incidents of hacks to shutting the shop due to regulatory measures- these exchanges have seen it all!
These modern exchanges are a source to buy or sell digital currencies like bitcoin, Litecoin, ether, etc. I also believe that these exchanges will play a huge role in terms of crypto adoption in the World.
Also, now after being in the legal field, it is also in my nature to check the norms, policies and regulatory compliances of these exchanges. So far, over the years, I have examined my share of modern exchanges.
What celebrity from the crypto world is your personal favorite? Who would you like to meet and talk to?
The first name which comes to my mind is ‘Vitalik Buterin’- the founder of cryptocurrency Ethereum, the second most valuable cryptocurrency in terms of market capitalization.
I love these words that he mentioned in an interview or article. He states “If blockchain were only usable by the rich, then the whole space would be far less interesting”.
What I like most about Mr. Buterin is his ideology of taking power back from the big players and handing it back on to the hands of common people. He has contributed immensely to the field of blockchain with his work on Ethereum. With Ethereum, he gave a new aspect to the development of decentralized applications.
If in case, I get the chance to meet Vitalik Buterin, I would love to discuss his opinions and ideas on how blockchain can be revolutionary in giving back what people rightfully own.
What is your main concern about cryptocurrencies?
My main concern about cryptocurrencies is its speculative nature. I have heard so many tales of people losing their hard-earned cash, their homes for magic money. People do not have awareness about cryptocurrencies and exchanges. The concept of bitcoin seems very lucrative but there is so much more to the digital currency.
Another thing I am concerned about is the slow process of the government to regulate cryptocurrencies. They hold a lot of true value if used in the correct way. By making people educate and spread awareness about them, will give a revolutionary transformation to the financial ecosystem.