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Crypto-Focused Fintech Company Simplex is Using AI to Tackle Fraud

Launched in 2014, Simplex is an EU-based fintech company that is looking to enable merchants, marketplaces, and cryptocurrency platforms to process online payments with complete chargeback coverage and fraud protection. …

The post Crypto-Focused Fintech Company Simplex is Using AI to Tackle Fraud appeared first on CoinCentral.



Launched in 2014, Simplex is an EU-based fintech company that is looking to enable merchants, marketplaces, and cryptocurrency platforms to process online payments with complete chargeback coverage and fraud protection. 

We connected with Netanel Kabala, Co-Founder & CAO of Simplex. Netanel is a specialist in all aspects of fraud, and before Simplex, Netanel worked at PayPal as a fraud analyst, dealing with user-facing risk platforms and back-end automation. 

What are the most significant pain points to tackle in the credit card space?

On a macro scale, fraud and red tape are the biggest issues. 

At Simplex, fraud isn’t a problem – our proprietary AI analyzes every transaction using fully automated machine-learning algorithms that effectively eliminate fraud. 

Red tape, due to regulatory inefficiency and legal inconsistency, remains a challenge for the industry however. A lot of this is down to operating a digital business in a world whose legal systems are still predicated upon physical borders, and it affects all global businesses, not just payment processors. 

Nevertheless, the costs of ensuring compliance across multiple jurisdictions and territories are significant, and are an impediment to launching new products.

How does Simplex differ from the traditional credit card industry?

Firstly, we’re crypto-focused, whereas most credit card companies want nothing to do with cryptocurrency. 

Secondly – and this explains why we can deal with crypto and our competitors can’t – our fraud-proof technology protects merchants from the risk of chargebacks. 

We’ve also taken great pains to ensure that our compliance is impeccable, and this enables us to show that the crypto industry can be supported in a responsible manner, while satisfying regulators and maintaining the highest due diligence standards.

How does the business make money?

Our revenue is driven by Simplex partners accessing our fraud-proof payment gateway, and by the conversion fees for retail users switching between fiat and crypto using our account service.

Who is the ideal Simplex customer?

Our customer base is very diverse; on the consumer side, we’ve got retail investors seeking a safe way to buy cryptocurrency, while on the enterprise side we support everything from SMEs to the largest cryptocurrency exchanges in the world that integrate our payment gateway.

Businesses seeking a safe way to accept card payments – without introducing risk – and their customers are the primary beneficiaries of Simplex.

Buying cryptocurrency with a credit card often comes with ludicrous rates. How is Simplex’s solution different?

For Simplex to be adopted by major global exchanges, we recognized that we would have to offer competitive rates; competing on security and reputation alone would not be enough. 

Keeping fees to a minimum is also how we grow our market share, while making the crypto market more appealing to investors, who can swap in and out of fiat currency without being penalized.

Can you touch on how Simplex use sAI to eliminate fraud while increasing conversion? What’s the actual process behind the scenes?

The AI analyzes each transaction and determines the likelihood of it being fraudulent, based on thousands of data points. 

The machine learning algorithm becomes more effective over time, enabling potentially fraudulent transactions to be screened out. This increases conversions while preventing chargebacks, allowing businesses to facilitate fiat-crypto payments with zero risks.

Simplex has a fairly extensive list of partnerships throughout the cryptocurrency space, with companies such as Binance, Bitpay, Huobi, and various others. For the entrepreneurs in our audience, what’s the best way to go about establishing relevant partnerships with similar companies

It’s really a two-step process, one internal and the other external. Before you can think about approaching potential partners, you have to ensure your product is fully optimized, and that the solution you’re presenting is better than the incumbents.

A list of Simplex's partners

A list of Simplex’s partners. Source:

 There’s no point in approaching major enterprises while you’re still fixing bugs and refining the UX. With Simplex, we focused on developing a payment gateway that we believed to be the best in class. Only then did we seek to engage in dialogue with companies that could benefit from our solution.

The Israeli startup community seems to have embraced cryptocurrency and blockchain. Can you touch on what it’s like launching and running an international payments company in Israel?

Israel’s reputation for tech excellence doesn’t need restating. We’re a small country, and in Tel Aviv where much of the startup scene is based, everyone knows everyone. This is great for sourcing talent and establishing partnerships as if you can’t solve a particular problem, there’s a good chance that you know someone in your network who can. 

At the same time, the insular nature of Israel’s tech community means it’s imperative to tread carefully and work to build bridges, rather than aggressively trying to corner the market at the expense of everyone else. When startups collaborate, they can achieve a greater outcome than could have been attained from working unilaterally.

What’s next for Simplex? What can we expect to see in the next 2-3 years? 

We’ve just launched Simplex Account, an online banking account that allows consumers to use their digital assets how and when they want, online and offline. Essentially, it allows them to create a single account and then access it across an array of Simplex partner platforms including exchanges and wallets.

Moving beyond this, we have been working hard on expanding our turnkey crypto payment solution, with new products in the pipeline. Finally, we’re looking to extend the list of countries where we’re licensed to operate, and are working closely with regulators in several jurisdictions to bring this about.

Thank you, Netanel!



‘Bitcoin maxis’ like Solana, but is there sound logic to that



Recent changes in cryptocurrency market dynamics have fueled the popularity of altcoins like Solana [SOL]. It recently became one of the most trending blockchain platforms around on the back of its surging price.

The cryptocurrency, in fact, had a 1-year ROI of over 4,200%, despite dropping by 34% since its peak in early September. Despite the latest hiccup in value, however, market observers believe the project has managed “winning over a significant number of Bitcoin Maxis or near-maxis.”

Ikigai Funds’ Travis Kling offered this observation on Twitter when he said,

“After talking to a bunch of folks over the last couple months, it’s pretty clear that SOL is successfully winning over a significant number of BTC Maxis or near-maxis, which have previously owned zero ETH or very little ETH.”

While the crypto-space is competitive, the tech-twist to the age-old saying – “competition of your competition is your ally” also holds true. Solana is not competing with Bitcoin. Instead, it is competing with Ethereum’s position in decentralized finance, NFTs, and smart contract offerings. Given the fact that transacting on Ethereum is still a pain for some users, Solana’s cheap and fast transactions provide a better alternative to many.

Solana’s DeFi projects recently crossed $3 billion, despite Ethereum hosting the maximum number of DeFi and NFT projects. While Bitcoin “maxis” are also opting-in for smart contracts, they prefer SOL over ETH, according to Kling.

Why? According to the exec,

“I think maxis look at ETH vs SOL and think –

Well as long as its not going to be all that decentralized, might as well have a smart contract platform that can actually handle enough throughput with cheap enough fees where it can really scale, instead getting choked up like ETH.”

However, not everyone agrees with Kling’s opinions. Many believe the decentralization narrative to be wrongly used by Kling, with another Twitter user @mikemcg0 noting that Ethereum is “more decentralized than BTC.” Anyone can run an Ethereum validator,” he said, “but only a select few oligopolies can mine BTC.”

Even so, Bitcoin mining has spread out even more after the recent China crackdown. Although the process is extensive in terms of effort, time, and money, according to another user, “anyone can” mine BTC “if they have the entrepreneurial mindset.”

Now, the latest outage faced by Solana did raise questions about the level of centralization. However, that has not really discouraged those who want to indulge in DeFi, NFTs, and smart contracts. As Solana forges new contracts with Hacken Foundation and, others institutions like Osprey Funds and Grayscale are in a race to include Solana in their respective bouquet of products.

In fact, Osprey Funds has already registered Osprey Solana Trust with the SEC.

‘Ethereum killer’ or not, Solana is en route to gaining more interest from the booming crypto-market. Even turning so-called BTC maxis in the process.

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Europe Now World’s Biggest Crypto Economy: Boasts Over $1T Worth of Transactions



Central, Northern, and Western Europe (CNWE) has grown into the world’s largest cryptocurrency economy since July 2020. The region experienced a massive increase in trading activity since then– particularly in the DeFi space.

The European DeFi Boom

Data from Chainalysis shows that CNWE received over $1 trillion in cryptocurrency over the last year alone. This represents 25% of global trading activity. Furthermore, it is responsible for at least 25% of all crypto value received by other regions, including 34% of the value received in North America.

This makes the EU the most concentrated in the world in terms of cryptocurrency trading volume. This is partially due to increases in all forms of trading activity over the past year, coming mostly from institutional investors.

Large institutional transaction value grew from $1.4B in July 2020 to $46.3B in June 2021, coming to take up half of all CNWE trading activity. The most pronounced increases were seen on DeFi protocols, where over 80% of these large institutional transactions were sent in June.

The impact of DeFi is further established when ranking coins in terms of transaction activity in the region. Despite being the largest cryptocurrency by market cap, Bitcoin heavily trails Ethereum in transaction volume among large institutional investors. Additionally, DeFi protocols took up a majority share of funds received by cryptocurrency services in CNWE in June 2021.


The Decline in Eastern Asia

CNWE has seen significant absolute increases in its crypto trading volume. However, its new place as the world’s largest trading hub is partly due to a sharp decline in market share held by Eastern Asia– the previous world leader.

In early 2019 the region held over 30% of global transaction volume. This figure has since fallen sharply to about 15% – less than CNWE, North America, and even Central and Southern Asia.

This may be related to China’s continued push to prevent and discourage crypto trading within its borders. China re-announced their ban on crypto trading in the country days ago, and have been moving to prevent all access to exchanges within the country.


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Here’s why a multi-CBDC bridge is being tested on Ethereum



The race to launch the first CBDC is one the world is following intently. While most have their eyes fixed on China’s digital yuan pilot, a group of countries has come together to take CBDCs a step further.

Phase 3 of Project Inthanon-LionRock saw BIS Innovation Hub Hong Kong Centre, the Digital Currency Institute of the People’s Bank of China, and the Central Bank of the United Arab Emirates experiment with a multi-CBDC bridge or an mBridge.

What does this mean?

The mBridge initiative would ideally allow central banks in different countries to issue and redeem their own CBDCs across borders on a common platform – without having to depend on correspondent banks.

Meanwhile, commercial banks would be able to “submit peer-to-peer CBDC push payments.”

The BIS September 2021 report stated,

“If successful, an efficient, low cost, compliant and scalable multi-currency, multi-jurisdiction arrangement can provide a network of direct central bank collaboration, greatly increasing the potential for international trade flows and cross-border business at large.”

The report further clarified,

“The prototype demonstrates a substantial improvement in cross-border transfer speed from multiple days to seconds, as well as the potential to reduce several of the core cost components of correspondent banking.”

Here, it is also interesting to note that the project’s Phase 2 prototype was built on Ethereum. This was because the core layer of the prototype contained the blockchain ledger and smart contracts.

Notes on features

As a multiple CBDC project, regulation and compliance were functional requirements. Central banks would be able to monitor transactions in real-time, set balance limits, control the balance held by their commercial banks, and use data for surveillance.

Scalability was also part of the design to later onboard more participants and jurisdictions.

However, one complication was the wide difference in remittance charges across countries. While the global average was calculated to be 6.38% of the remitted sum, the report observed that even a percentage as low as 1% would be costly for payments in the millions of dollars.

An update from China

Alongside the mBridge project, China has also been steamrolling ahead with its CBDC program.

Changchun Mu, Director-General of the DCI of the People’s Bank of China. confirmed that e-CNY pilots have been taking place in 10 areas.

Mu added,

“Payment methods such as QR code and tap-and- go have been well-supported and innovative services such as dual-offline payment and wearable device payment have been tested for safety and efficiency.”

Meanwhile, Howard Lee, Deputy Chief Executive of the Hong Kong Monetary Authority, suggested that an e-HKD could also be in the works.

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