Seychelles ltd

[AMD]

Is money in the EMI protected like it is in banks?

no it is not, for that reason you find 5 or more EMI's to split your money into.

Parts of it you could even exchange to Tether or USD Coin (crypto) if it is for holdings, so you avoid any big los but have 100% asset protection and Privacy.

 

[Sols]

no it is not, for that reason you find 5 or more EMI's to split your money into.

I don't meant to single you out but where is this lack of understanding of how EMIs work coming from? Has anyone actually looked into how EMIs are regulated, supervised, and audited?

I don't want to make it sound like EMIs are suitable for storing wealth. But it's disappointing to see so many members being so confidently incorrect. This forum flourishes when we all learn from each other.

Banks in many jurisdictions offer a deposit insurance of somewhere in range of 100,000 – 250,000 USD/EUR per person per bank. The exact implementation varies, but this security often doesn't come from the bank but rather from the government. Banks pay into a pool which is used to pay out deposit insurances, before dipping into the funds from the failed bank. If a bank fails in a jurisdiction with a 100,000 EUR deposit guarantee and you have 100,001 EUR in that bank, you can say goodbye that to that 1 EUR.

EMIs, on the other hand, are required to maintain 100% reserves. Whatever your and everyone else's balances are, they have in a bank account somewhere. This is a mixed blessing. It means they can only make money from charging fees and cannot make money from lending or fractional reserve banking. The upside is that if an EMI fails, they are holding 100% of the e-money they have issued in reserves and you will be able to get your funds back.

The EMIs store their funds with other banks in special Client Funds account, whose balances the bank may not use for lending. This is one reason why most banks don't want to work with EMIs, since they are very limited in their ability to earn money from offering bank services to EMIs.

 

[Davis123]

I don't meant to single you out but where is this lack of understanding of how EMIs work coming from? Has anyone actually looked into how EMIs are regulated, supervised, and audited?

I don't want to make it sound like EMIs are suitable for storing wealth. But it's disappointing to see so many members being so confidently incorrect. This forum flourishes when we all learn from each other.

Banks in many jurisdictions offer a deposit insurance of somewhere in range of 100,000 – 250,000 USD/EUR per person per bank. The exact implementation varies, but this security often doesn't come from the bank but rather from the government. Banks pay into a pool which is used to pay out deposit insurances, before dipping into the funds from the failed bank. If a bank fails in a jurisdiction with a 100,000 EUR deposit guarantee and you have 100,001 EUR in that bank, you can say goodbye that to that 1 EUR.

EMIs, on the other hand, are required to maintain 100% reserves. Whatever your and everyone else's balances are, they have in a bank account somewhere. This is a mixed blessing. It means they can only make money from charging fees and cannot make money from lending or fractional reserve banking. The upside is that if an EMI fails, they are holding 100% of the e-money they have issued in reserves and you will be able to get your funds back.

The EMIs store their funds with other banks in special Client Funds account, whose balances the bank may not use for lending. This is one reason why most banks don't want to work with EMIs, since they are very limited in their ability to earn money from offering bank services to EMIs.

Nice that means they are much more secure than banks. Good to know this info. I think Capital security bank here also holds accounts at some Singapore banks for security. Their charges are high but they work with most offshore companies. Not sure about Seychelles now due to all the recent furor over them.

 

[Seychelles Service]

Not sure about Seychelles now due to all the recent furor over them.

what do you mean?

 

[Davis123]

what do you mean?

Well most of the banks don't want to sign up anyone with Seychelles due to all the OECD hoopla. It used to be fairly easy to get a Singapore or HK bank up till 2011 with Seychelles company but not anymore. The last I know only Al Salem bank in Seychelles was able to work with them. I think there was a Barclays Bank in Seychelles until 2014-2015 too but they stopped all their activities in Seychelles altogether.

 

[Seychelles Service]

Well most of the banks don't want to sign up anyone with Seychelles due to all the OECD hoopla. It used to be fairly easy to get a Singapore or HK bank up till 2011 with Seychelles company but not anymore. The last I know only Al Salem bank in Seychelles was able to work with them. I think there was a Barclays Bank in Seychelles until 2014-2015 too but they stopped all their activities in Seychelles altogether.

https://www.offshorecorptalk.com/threads/seychelles-ltd.29250/post-131248

 

[hernanday]

Arguably more so than with a bank. EMIs are required to maintain 100% reserves, whereas banks are only required to keep a much smaller ratio in reserves and can use your money for lending and investment services.

Who regulates that they do that, like what if the EMI fails, goes bankrupt? Do they have federal backing?

 

[Fazoule]

no it is not, for that reason you find 5 or more EMI's to split your money into.

Parts of it you could even exchange to Tether or USD Coin (crypto) if it is for holdings, so you avoid any big los but have 100% asset protection and Privacy.

Yea do that and hold 500k in USDT. When USDT collapses watch your 500k become 0.

 

[Davis123]

Yea do that and hold 500k in USDT. When USDT collapses watch your 500k become 0.

Usdt a 0 from 500k ?. I am confused ??

 

[Fazoule]

@Sols Yes in theory your are 100% right but... eh who are we do doubt that Revolut, N26 and like follow the rules ?

(Did I hear Wirecard in the background?)

Wasn't Wirecard supposed to be 'audited' by a renowned firm and.... 4 billion went missing ?

Not saying this will happen every EMI but... I'd personally won't use these guys to hold my business money


and.. again, Revolut for example doesn't not have a number on which you can contact them on, would you seriously hold 200k on something like that ??

 

[Fazoule]

Usdt a 0 from 500k ?. I am confused ??

Yes.

You are aware USDT only works because the guys being it are making it work and that all these trillions USDT are supposedly backed somewhere? The day they stop or the day something dodgy comes to the light... USDT wont' be pair 1/1 anymore with USD and all your USDT will become worthless.

 

[Sols]

@Sols Yes in theory your are 100% right but... eh who are we do doubt that Revolut, N26 and like follow the rules ?

Revolut is an EMI and transitioning into becoming a bank (they have had a bank license in Lithuania pending for a long time now). If they weren't maintaining 100% reserves, the FSA in the UK would be going after them for it.

N26 has been a bank since 2016 when they obtained a bank license. That means they are not an EM I and as such as not required to maintain full reserves, which an EMI is required to do. Since N26 is a bank, they are permitted to undertake banking activities.

(Did I hear Wirecard in the background?)

Wasn't Wirecard supposed to be 'audited' by a renowned firm and.... 4 billion went missing ?

Wirecard is a bank (not an EMI), as you may recall. Do you remember earlier when I explained the difference between EMI and banks?

Not saying this will happen every EMI but... I'd personally won't use these guys to hold my business money


and.. again, Revolut for example doesn't not have a number on which you can contact them on, would you seriously hold 200k on something like that ??

There is no legal requirement to have a phone number. There is a legal requirement to maintain 100% reserves. I don't think you're taking a rational perspective here and letting your emotions cloud your view.

I'm also not saying I would store wealth in an EMI, but the answer to the question "Are EMIs required to maintain a higher reserve than banks" is yes, regardless of whether you can't pick up the phone and call Revolut. Do you see how those are two completely different things?

Who regulates that they do that, like what if the EMI fails, goes bankrupt? Do they have federal backing?

The financial services commission of the jurisdiction where the EMI is licensed. In some cases, the authority requires a direct connection for real-time monitoring but more commonly are monthly or quarterly checks and annual audits, and random inspections.

If an EMI goes bankrupt, it means they have run out of money to meet their obligations (creditors, salaries). They are not permitted to dip into their Client Funds balances to pay creditors, so your funds remain safe. Creditors can take every other avenue, but they cannot go after the Client Funds.

There is no government backing, i.e. no deposit insurance. Instead, they operate on 100% reserves.