Later that month, Monaco put out a press release describing the benefits of its Visa-branded card.
Again, no agreement with Visa.
Monaco is, however, working with a Visa-licensed issuer, Wirecard AG. As far as Visa goes, Monaco is being vetted through the credit-card issuer’s review process, according to spokeswoman Lea Cademenos.
Cademenos didn’t say how Monaco’s decision to promote two non-existent relationships with Visa would affect the review process. Wirecard didn’t return requests for comment.
“In retrospect, we probably wouldn’t put the Visa name on there yet," Kris Marszalek, Monaco’s chief executive officer, said in an interview. “It probably would have been more prudent to just leave it out until everything is done."
In an 31 August press release, Monaco announced a new mobile application along with plans to debut five different payment cards. There was no mention of Visa. The value of Monaco’s currency dropped 29% that day. Accounting for all its ups and downs, Monaco’s money has tripled in value since 17 May.
Monaco dropped 7.7% to $7.57 at 9:18am in New York. The five largest cryptocurrencies—Bitcoin, Ethereum, Ripple, Bitcoin Cash and Litecoin—all posted gains Monday.
Fledgling digital-money companies are clamouring for deals with Visa because it would mean their currencies would be accepted at the 44 million merchant locations in Visa’s network. But there are obstacles. While cryptocurrencies typically offer users anonymous transactions, payment networks and financial institutions are required to follow know-your-customer rules to prevent money laundering and funding for criminal activity.
To say the market for digital money is like the Wild West would be unfair to the comparatively tame American frontier days. Dozens of cryptocurrencies compete for investors’ attention with few restrictions and a ready-fire-aim mentality. The admonishment “buyer beware’’ seems inadequate, and, to even mention it, almost naive.
Marszalek’s history as an entrepreneur is a checkered one. And a bit like swinging from vine to vine in the digital jungle.
In 2010, Marszalek founded the daily deals website Bee Crazy, which was similar to Groupon. He sold it to iBuy Group Ltd in December 2013 for $21 million. After the deal, he became chief operating officer of iBuy, which later purchased Ensogo Ltd, a unit of LivingSocial Inc., for $18.5 million. IBuy ultimately changed its name to Ensogo and named Marszalek CEO in August 2014.
In Marszalek’s first year as CEO, Ensogo posted a A$67 million ($60.4 million) loss, more than 11 times its 2013 deficit, as the company’s operating expenses ballooned. The next year, the loss widened to A$80 million.
“I was asked after I sold the company to try and turn the business around," Marszalek said. “It was a very, very difficult task as the business model was failing."
In June 2016, Ensogo’s board of directors announced the company was shutting down Bee Crazy to preserve cash for new investment opportunities. Bee Crazy came under fire from the Hong Kong Consumer Council for the sudden closing, which left consumers and local merchants who bought and sold coupons on the website with no way of contacting the company.
“The council was deeply concerned about its closure and had tried to contact the Bee Crazy’s management through different channels, in order to understand how the company would arrange and handle the related inquiries and complaints," the council said in an email statement. “However, the council has been unable to reach the head of Bee Crazy since its closure."
The Consumer Council received 117 complaints and 328 inquiries about Bee Crazy over the course of eight days in June 2016, according to the statement.
Marszalek, meanwhile, resigned from Ensogo. Within weeks, Monaco was born.
Monaco’s digital currency gained 166% to $7.65 on 16 August, when the company announced it would list on Binance -- a cryptocurrency exchange in China—giving Monaco users in China the ability to trade the tokens securely.
Soon after, Chinese regulators were looking to dampen irrational exuberance. China announced 4 September it would outlaw initial coin offerings. The country also aims to stop exchange trading of cryptocurrencies, people familiar with the matter told Bloomberg News.
The moves won’t impact Monaco’s trading on Binance, which has already banned Chinese internet addresses from trading on its platform, Marszalek said. Monaco also conducted its token sale using a Swiss entity after finding that country’s regulators to be more “progressive’’ toward digital money, Marszalek said.
Marszalek said he and his team are focused on securing a deal with Visa. The company has received 13,000 reservations for Monaco cards, he said. One hungry investor even kicked in $2 million worth of Ethereum, another cryptocurrency, to secure black-card No. 1 from the company.
“When you’re successful, you don’t learn as much," Marszalek said. “You remember the lessons better if things go wrong, rather than the other way around." Bloomberg