The LOI (letter of intent) allows the buyer or seller to express their interest in buying or selling a product or service by defining specific characteristics.
The LOI is thus a document which has a legal value aiming to manifest a commitment towards the seller or the buyer.
It makes it possible to determine the characteristics of the offer.
The letter of intent applied to the Bitcoin OTC market.
The LOI expressly designates the Bitcoin wallets being offered for sale.
For Predya, in order to be able to position itself in the purchase of BTC, the company must check if the proposed bitcoins do not come from illegal or doubtful sources.
Below is a (non-exhaustive) list of illegal sources:
Dark markets places
Dark Marketplaces form a small part of what is called the “Deepweb” or “deep web”, which is the part of the web that is not accessible via our traditional web browsers.
The Access is through the “TOR Network”, a network that consists of hiding our identity (Public IP). The use of dark markets places is mainly for illegal purposes.
The proposed products are of type : Weapons, Drugs, Prostitution, Organ trafficking, Medication, Forgery…
We will not follow up if the Bitcoins proposed have been linked (directly or indirectly) with Dark Web platforms such as SilkRoad, DreamMarket, AlphaBay… (Non Exhaustive List)
Criminal Activity and Terrorist Financing
We will not follow up if the Bitcoins proposed are in any way linked to criminal activities such as terrorist financing or other clandestine networks listed by the authorities, or if we have doubts about the seller’s activities
Money Laundering and Mixing Services
Bitcoins that are “laundered” are washed with a technique that consists in carrying out a large number of transactions from different origins, which has the effect of concealing the user or group of addresses that carried out the transaction and thus preserving confidentiality and anonymity.
We will not follow up if the Bitcoins proposed have transited through such services such as BitMixer, BestMixer.io, CoinMixer … (Non-Exhaustive List)
Stolen Cryptocurrencies – Investment Scams
Some Bitcoins are listed on various databases, as stolen from hacking activities of exchange platforms, personal computers/phone and/or Blackmailing/Ransomware practice (ransom requests). Indeed, some malwares are known to paralyze devices by encrypting data and require a ransom in Bitcoin, Ethereum or Monero to return the access to its user.
They are more commonly called ransomware and target businesses, hospitals and large IT infrastructures.
We will not follow up if the Bitcoins proposed are in any way linked services such as CryptoLocker, WannaCry, Locky… (Non-Exhaustive List)
Exchange / Exchanges Platforms
Some fake sellers/scammers approach us with the wallet of well-known platform exchanges and claim those wallets are for sale.
We will therefore, not follow up if the Bitcoins proposed belongs to exchange platforms (Bitfinex, Binance, Coinbase, Bitstamp…).
The only option for us to buy Bitcoins coming from platform, is for the seller to withdraw the coin on a dedicated/personal wallet and submit us the public wallet address.
In order to help you in this process, you can read our articles:
Article 1 (Beginner) How are BTC stored?
Article 2 (Advanced) “How to create a secure Multi signatures wallet step by step with several Ledger and eEectrum”.
How does PREDYA protect itself from dirty and blacklisted bitcoins offered for sale in OTC ecosystem?
To prevent Money Laundering activities, Predya has developed an in-house due diligence solution. In order to start a business relationship with Predya, it is mandatory that the seller discloses the public wallet address so we can run a compliance/forensic analysis on the BTC being offered.
An analysis based on a solution developed in-house, by our engineers, using Machine Learning technology to detect and recognize the behavior of suspicious wallets.
Only after this test will we be able to develop a Letter of Intent (LOI).
The amount of Bitcoin proposed
The quantity of Bitcoins will always be expressed in number of unit of bitcoins.
The different prices, NET and GROSS will be specified in percentage relative to the spot price based on the usual Bitcoin price reference.
It goes without saying that an offer that is consistent with the market must be made.
To do so, an article on mining activities is made available to you.
A special article on advanced bitcoin mining techniques is also available.
Thanks to these articles you will understand that it is not possible for a seller or his agent to offer you 3 million BTC for sale from a mining farm.
In fact, the quantity of Bitcoin mined worldwide over the entire year 2018 will be approximately 640,000 BTC.
It is therefore impossible to mine bitcoins for astronomical quantities.
Commitment to confidentiality
Predya undertakes to protect and keep strictly confidential all information brought to its knowledge during negotiations.
Summary on BTC compliance
We hope that you understand that AML (Anti-Money Laundering), KYC (Know Your Customer), KYT (Know Your Transaction) measures are strict and note that anyone buying a wallet linked to terrorism or other illegal activities is facing severe legal consequences.
Therefore, we (and you) cannot afford to neglect this point.
If I disclose the Public Wallet, can you get direct access to the seller?
NO. Nothing connects the physical seller to a public wallet address number.
The article on “Elliptic curve cryptography” will allow you to better understand the generation of a Bitcoin wallet and its security.
As for the legal documentation (NCNDA…) , it will be requested in due time and forwarded to/by our legal department.
For the time being, the reception of a public wallet can make it possible to lay foundation of a possible business relationship.
Moreover, it is not possible to start a discussion with all brokers on the sell side.
We would therefore (and after legal documentations signed) like to be put in direct contact with the actual seller or agent.
It goes without saying that the DDA is to be carried out by the broker to check that
- The Seller is Real
- The Seller controls the coins he is claiming to own.
The DDA must be provided at the time of submission of the business proposal.
An article explains how to check that a person has Bitcoins as well as some tips to allow a good verification.
To submit a case to us it is possible to do it directly via our online support, available in the section “Working with us”.
You will then be called back for possible clarification and communication of the results of the analyses on the public Bitcoin Portfolio that you have submitted to us.
We provide you with our workflow in pdf format to help you understand Bitcoin OTC transactions procedure and how to work with us.