Uldis Teraudkalns of Nexpay: “Verify customers properly”

Crypto businesses are especially vulnerable to be abused by scammers if they don’t have proper ID verification with liveness checks and additional checks for unlikely customer groups. Scam is an existential question for the industry, so this is a must. As part of my series about the “5 Things That Can Be Done To Improve […]

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Crypto businesses are especially vulnerable to be abused by scammers if they don’t have proper ID verification with liveness checks and additional checks for unlikely customer groups. Scam is an existential question for the industry, so this is a must.

As part of my series about the “5 Things That Can Be Done To Improve and Reform The Cryptocurrency Industry” I had the pleasure of interviewing Uldis Tēraudkalns.

Uldis Tēraudkalns is the CEO of Nexpay, a Lithuania-based fintech startup providing banking infrastructure for the digital assets industry. Uldis counts with more than a decade of experience working in finance and investment management, as a result of which he has served on the boards of companies in different stages and various industries with a particular passion for Fintech. Uldis holds a Master’s degree in Finance from the Stockholm School of Economics, Sweden. Uldis is one of the co-hosts of The Pursuit of Scrappiness, a leading business podcast in the Baltics.


Thank you so much for doing this with us! Our readers would love to “get to know you” a bit more. Can you tell us a bit about your “backstory”?

I grew up in Latvia in the resort city of Jurmala, just 40 kilometers from the capital Riga. My father had always wanted to be a musician, but he dropped out of music school. So my parents wanted to give me the chance to achieve what he never could, and I was also sent to music school.

I enjoy singing and I am still actively participating in a choir. However, it was what my father actually ended up doing that inspired me more. He is a business owner, and although it’s not a huge company, I noticed that particular sense of pride of leading and having one’s own company. I knew I wanted to eventually feel the same. So I moved from music school to a gymnasium in Riga and from there went on to study at one of the best business schools in Europe, the Stockholm School of Economics in Riga. After an experience in corporate banking at SEB, I moved to Sweden to pursue my masters in finance SSE Stockholm.

After returning to Latvia, I waved goodbye to the world of banking, and joined a private investment firm. It was great to look through so many types of businesses and leave the banking bubble. I was introduced to Bitcoin when an investment opportunity in a digital assets business had me go down the rabbithole.

Can you tell us the story of how you got first involved in the cryptocurrency industry?

I was working at an investment firm and a project relating to cryptocurrency was brought to my attention. In order to understand the project, I had to learn everything about and get to understand Bitcoin. It was no simple task. This was in 2015, and I’m still on the journey of learning about Bitcoin and what it can do for humanity, six years on.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

I do believe the main person I am most grateful towards is my wife. We have known each other since studying together at our Alma Mater, the Stockholm School of Economics in Riga, and have been challenging, pushing and supporting each other ever since. Oftentimes the decisions to make leaps or radical pivots are a lot more challenging than the physical work involved before or after that decision.

I have always been leaping into intimidating challenges and taking up new roles for which I have the potential, but not necessarily the experience for. A critical part of being able to take these risks is having someone to tell you you’re good enough, that everything will work out, and that they are with you and ready to make sacrifices to support you. This was the case with me and Nexpay. While I was fearing that it’s too big a bite to swallow for me, my wife encouraged me to step up to the challenge, and here we are!

Can you share a story of a time when things went south for you? What kept you going and helped you to overcome those times?

Life and business is full of ups and downs. Many founders and CEOs will agree with me that, after having a certain amount of problems faced, you get used to it and just add it to the list of hundreds of problems to solve.

Critical in overcoming smaller and bigger problems and tough times is having good sparring partners at least on your co-founder or management team level. People who you trust and respect and are able to put your heads together, come up with a plan and execute. In the ideal world, you would also have a more seasoned mentor to help you lift your head up and see the big picture.

In your experience, what are the top strategies that crypto firms should consider to have a stronger competitive edge?

  1. Expand the market rather than fight for the existing pie. Address the local customer base. Private individuals are increasingly interested in investing in digital assets. There are people out there who have founded enormous tech companies who are throwing their backing behind Bitcoin and cryptocurrency. The idea is traveling, but people in different geographies and from different demographics don’t always have access. Creating better access is key.
  2. Don’t postpone compliance. CZ from Finance recently said that “compliance is a journey” and there is truth in that, especially for small and fast growing companies. However there are things on which you just cannot compromise to build a long term sustainable business. Unfortunately in the crypto industry, there has been underinvestment in compliance, which will lead to problems down the road. It’s always worth it in the long term.
  3. Build tools for crypto companies. The industry is exploding. The teams are agile. There is a lot of money in the space. Help the industry be faster, closer to the customer, more compliant, more mainstream. There are a number of pain points that crypto companies face. And that means there is a market for solutions. It’s not just having an edge over other crypto companies. It’s also about having a killer solution that will solve a big pain point for them.

What are the 3 things that most excite you about the blockchain industry in general? Why?

  1. Bitcoin. It has excited me from day one and it’s an onion with new and new layers every year. I am not convinced about the value proposition of any other coin or token, but the promise of Bitcoin is something that truly excites me. And over the past year it has excited so many smart and visible people ranging from big company CEOs, hedge fund managers, professional athletes and even becoming a legal currency in El Salvador. If you are in any form involved in the crypto industry in 2021, I don’t know how it would be possible not to be excited about the future of Bitcoin.
  2. Blockchain applications. I am yet to see a strong and sustainable application of a public blockchain outside the main coins, token offerings and DeFi. I am excited to see how the Estonian forest tokenization project single.earth will work out as it’s a fantastic blockchain application at least in the founder’s vision.
  3. People. Nowhere else have I encountered so many smart, energetic, entrepreneurial and friendly people as in the crypto and blockchain industry. On multiple occasions I have heard the phrase used “I don’t see us so much as competitors, but as two companies co-existing and building the industry together”. It’s just very fun, engaging and intellectually stimulating to work with such people.

What are the 3 things worry you about the blockchain industry? Why?

  1. Misplaced regulation. There are parts of the industry that are under-regulated and then there are parts that governments and organizations are attempting to regulate, which just don’t make technological and logical sense. The adoption levels of Bitcoin and crypto are reaching such highs that governments have to really invest into understanding the industry and coming up with the best ways to regulate it. Slapping existing frameworks on new technology just won’t cut it.
  2. Scams. There is a huge amount of scam happening by abusing cryptocurrency and crypto platforms. In this story, crypto is just a vehicle, it’s not at fault, but it’s a very vulnerable vehicle. It combines the reference of quick profits for the victims, making them easier to cheat and at the same time it provides easier escape routes for the criminals as once they have hands on the coins, it’s irreversible. Education seems the obvious answer, but if someone gives teamviewer access to their computer and access to all bank and other accounts to complete strangers on the phone, then, what can you do? We work with our clients and partners tirelessly with this problem, but for now I don’t see a light at the end of the tunnel. Again, an opportunity to come up with new solutions.
  3. Wasted energy and talent. There are a lot of projects that are trying to slap blockchain onto problems that can be solved with a centralized solution and has no need for decentralization. Thankfully, the number of such projects is steadily decreasing, but I would still like to see that talent, energy and capital being deployed to solve real problems.

Ok, thank you for all of that. Here is the main question of our interview. Can you please share “5 Things That Can Be Done To Improve and Reform The Cryptocurrency Industry”? If you can please share a story or example for each.

First: Verify customers properly

Crypto businesses are especially vulnerable to be abused by scammers if they don’t have proper ID verification with liveness checks and additional checks for unlikely customer groups. Scam is an existential question for the industry, so this is a must.

Second: Focus on regulating the centralized exchanges and wallets

Instead of trying to regulate on-chain transactions and decentralized applications, regulators should spend their energy ensuring not only AML, but consumer protection, investor protection, market integrity and other important safeguards that can and should be applied to centralized businesses who handle funds for people. Don’t waste time regulating decentralized protocols as it’s like trying to regulate the wind — it will find another way.

Third: Don’t slap blockchain on problems that don’t need a blockchain to solve

Most problems can be solved with a relational database and centralized decision-making. Focus on true innovation.

Fourth: Provide a better user experience

It’s challenging to operate in the crypto world safely and conveniently. You usually can have one or the other. Entrepreneurs must innovate to ensure both.

Fifth: Focus on non-custodial solutions

As the maturity of users and technology increases, the industry must go more into non-custodial services, where there are less and less centralized points of failure that can be abused by criminals.

How have you used your success to bring goodness to the world? Can you share a story?

Recently, an old friend from college and I started a podcast on tech for Baltic audiences. We have had amazing guests already with interesting stories and truly practical insights. Several interviews have already inspired life-changing actions from the audience.

One of our listeners applied for an accelerator program with the ambition to drop their corporate career and become an entrepreneur after listening to an episode where our guest had done the same and shared their experience and learnings. It’s this kind of impact that is the most rewarding when doing something for the community.

Can you please give us a “Life Lesson Quote”? Can you share how that was relevant to you in your life?

“Your best teacher is your last mistake,” by Ralph Nader is an excellent life lesson quote. In an ideal world you learn from other people’s mistakes. In reality, at least in my life and career, in most cases I have learned the biggest lessons only after making my own mistakes. Especially in business, you can read books, listen to podcasts and learn from friends and peers and that will help you avoid some small mistakes. You will have some guidance. But only when you make your own big mistakes will you really take stock of what works and what doesn’t, and how to avoid similar situations in the future.

What is important here is to understand that eventually you will make mistakes, and big ones, and be ready to learn from them. Consider those mistakes your teacher, rather than something to be ashamed of, and be open to trying things, even if it means they might lead to a hard lesson.

How can our readers further follow your work online?

Uldis Twitter: https://twitter.com/uldis_te

Uldis LinkedIn: https://www.linkedin.com/in/uldis-t%C4%93raudkalns-32b83715

Nexpay Twitter: https://twitter.com/Nexpay_

Nexpay LinkedIn: https://www.linkedin.com/company/76445654

Thank you so much for this. This was very enlightening!

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