AML and KYC – Tales from the Trenches

I get referrals all the time. Some good, some great, some suck. I appreciate all of them and regardless I know it’s all for the good: making the connections, wanting to help a client and hopefully make a few bucks in the meantime.

To my knowledge, there aren’t many real estate agents that are actively in the crypto space. Less than ten, maybe? By active, I mean actively helping buyers and sellers purchase or sell real estate with crypto, not just watching the market and investing. In fact, I think I have agents put into five categories:

1. Agents who don’t care/don’t want to deal/think crypto is a scam
2. Agents who are just jumping on the crypto bandwagon but not knowing a thing about it
3. Agents who are interested and want to be involved but not sure how
4. Agents who are well versed in crypto but have never done a deal
5. Agents who have completed crypto-to-cash or crypto-to-crypto transactions

I get a lot of calls from category number three. Well-meaning, they know it’s not going away anytime soon, but may or may not have time to deal with a client who calls to say they want to buy or sell with cryptocurrency.

To those agents, I say, keep the referrals coming, even though many of them aren’t what they say. There is still a huge learning curve for all of us, and I’ll get to that in a minute, but I’ll share a recent experience first:

I had a referral from a great agent back east who sent me a lady in California who supposedly had a ton of coins and was ready to buy. So far, so good. When I got her on the phone, I asked the usual, basic questions:

1. Which coins are you holding?
2. Are you looking to do an “all cash” transaction or a hybrid?
3. What is your price point?

From these three initial questions, I can tell if they’re bullshitting or not, and a savvy crypto investor will show themselves immediately. In this case, the woman told me she was holding $36M in TBC, was looking to convert it to Bitcoin for either a Bitcoin-to-Bitcoin or a Bitcoin-to-cash purchase, and her price point was in a certain area of Los Angeles county anywhere from $100K to $1M.

Danger, Will Robinson!

Let me state that there are over 1,500 altcoins out there. I’m familiar with MAYBE 50. I had never heard of TBC and when I asked her on which exchange she had it, she couldn’t tell me. Also, you know as well as I do that one can’t purchase a cardboard box for $100K in Sunny SoCal. Not even for $300K.

I politely excused myself from the conversation and said I would do some research and get back with her the following day, and excited as she was, she said she would send me some videos about the coin (um, okay). I then went on to (a must for anyone following coins) and did a search for TBC. Nothing. Then I did a search for “The Billion Coin” (yes, that’s what it’s called) and for some reason it came up on Google under, so go figure. At its heyday back in April of 2016 it was valued at a little more than $4.00, but now it’s worth $0.001. In her mind she had 80 coins valued at $36 Million and was ready to buy her first home. Lawdy. When I watched the videos she sent, I couldn’t believe my eyes. There was a woman with earbuds and a tank top, sitting in front of a crappy apartment building with a cheesy (and loud) fountain, congratulating her viewers for taking the next step to financial freedom. Puke. Mr. Google wasn’t shy in letting me know that the coin was a total pyramid scheme pump-and-dump, preying on people who are desperate to get out of debt. I didn’t have the heart to call her back to tell her she was flat broke, instead I called the referring agent back to let them know (wimp? Yes.) that the coin was bogus. All in a day’s work.

Another fun one: A guy from another country found me on LinkedIn and said he had a billion dollars in DynamiCoin. Cool. Seeing as how its market capped out at $13 million and change, I was still curious. He informed he wanted to buy up all the major Beverly Hills hotels, one by one, and was completely serious. I’m on it. Not. Next time, start a little smaller, K?

Another recent case, another nice person asked if I would promote an island off Croatia, yacht included (or not, if that was your preference) for Bitcoin or whichever preferred currency. I’m all too willing to help, provided they can verify the owner and that it is indeed a legitimate property with land records. They sent me dozens of beautiful drone shots, but when I persisted on verifying, they stressed the owner was very firm on keeping his anonymity. We went back and forth a couple of times, but my gut just said no. No way am I going to help sell some rando island with a yacht – for all I know Elmer Fudd owned it, which would be more information than what they were willing to give me.

Agents: All I’m saying is do your homework. The last thing we want to do is lose our license over some horrible money laundering debacle. Know your customer. Even if you’re not quite sure, better to err on the side of caution. Or call me. If I don’t know, I know people who do.

My whole point to the sad, long-winded stories is that we have a hard enough time vetting regular buyers, and now we’re tasked with vetting the buyers who are wanting to buy with this new crypto stuff. Someday soon, blockchain technology will be able to automatically verify buyers, sellers, properties, etc. and streamline the process but until then, ask. Questions. If it still eludes you and you don’t know what other questions to ask, then email me at

Facebook and Cryptocurrency

Facebook had some hard-hitting news last week when it announced its ban on ads containing cryptocurrency, ICOs and Bitcoin. As I stated in my vlog, I get what they’re trying to do as Facebook cracks down on advertising, but I feel as if they’re throwing the proverbial baby out with the bathwater due to their lack of discernment of which businesses are actually legit. I know it’s not a small task, but the rest of us who run upstanding businesses based on crypto shouldn’t have to take the brunt of the idiots who claim they can make you a fortune so you can quit your day job.

One snake oil salesman is James Altucher. If I’ve seen him all over the place I’m sure you have as well. According to, Mr. Altucher has spent over $2.7M on ads that have turned into the herpes of crypto advertising that follow you everywhere whether you like it or not. He has cracked the “crypto code,” and for a mere $2,000, he’ll send you a newsletter that outlines how you too can jump on and ride the crypto train. He even went on to voice his support for the Facebook ban. You go, James.

Other ads which I find annoying are in my own industry, which kills me. I know that crypto is a hot commodity, not matter what kind of market we’re in week to week. A colleague of mine sent me a link to a Realtor up in NorCal offering a webinar on how to convert Bitcoin to real estate investments, followed up by a free coaching program. Just out of curiosity I found the agent on LinkedIn and sent him a message just to see what experience he had with crypto transactions, and I have yet to hear back. No doubt there’s some sort of hidden sales pitch in there somewhere.

I feel like I have to reiterate this: DON’T GIVE YOUR TIME AND MONEY TO ANYONE in order to learn about cryptocurrency. It’s all right in front of you on the Interwebs. DO YOUR HOMEWORK. Heck, when I have the time I schedule calls with agents all over the country (world, actually) who have reached out to me to help them and answer any questions they may have. I learned by doing (I find myself in the baptism-by-fire scenario frequently ‘cause that’s just how I roll). Converting crypto into a tangible investment like real estate isn’t rocket science, it just takes some ingenuity, creativity and some critical thinking to get the deal done.

Same goes for ICOs. If you get wind of one that piques your interest, do the homework, don’t just buy into it blindly and cross your fingers. Also, any ICO who advertises on Facebook should be banished from the crypto space entirely as well as watching any Breaking Bad episodes for the remainder of the century. That’s how terrible they are.

I’ll step off the soapbox now. Although Facebook is well-meaning most of the time, it will be interesting to see its progression with cryptocurrency itself. Mark Zukerberg announced looking into cryptocurrency as a form of payment and a possible partnership with Litecoin, while Coinbase appointed Facebook exec Marcus Lee to its board of directors. Hmmm…

So where does that leave us, the businesses who still need to get the word out that they’re, well, in business? I found a decent article on about where to begin, and I’m planning to try some of these out (except Snapchat. I would have to turn in my Gen-X card if I snapped, which is too high a price to pay):

Reddit – The most logical alternative to Facebook and possibly better audiences.

Instagram – Linked to Facebook, but so far so good on crypto ads.

Steemit – I’ve included another good article here for reference.

Product Hunt – Completely new to me. Follow up discussion will ensue.

Google Ads – Who clicks on an ad when doing a search? Would love to get your experience with this one.

Also Twitter, LinkedIn, Pinterest (not so much crypto, but I see a lot of traditional real estate shots here), Stumble Upon, Snapchat (shudder) and Quora.

Blockchain and Brokerages – Getting the Conversation Started

We’re still at the forefront of blockchain technology, what it is and how it’s going to disrupt a multitude of industries. There is no “if” in this scenario, only when. While my obvious focus is on real estate, I and my colleagues who are on board are still figuring out the how. No doubt the early adopters will have an advantage, but what I know for sure is that blockchain technology will fast become a necessity in the day-to-day innerworkings of real estate.

Since my involvement in the crypto space, I’ve had the pleasure of meeting several brilliant blockchain experts, most have which opened my eyes to the possibilities of blockchain technology. I’ve blogged about several proptech ICOs in the past, and not to do another shameless plug (who am I kidding, it’s my blog, isn’t it??) for CPROP, but they’re one of the frontrunners in the race for wide-spread adoption in the industry. Powered by blockchain, the concept is to have a ‘one-stop-shop’ for everything needed in a real estate transaction, from selecting an agent, to the purchase agreement, removing contingencies, finding vendors, financing and closing the deal. In theory, Escrow times can be slashed to just days instead of the typical 30-45-60-day escrow.

I also met Oliver Tickner, CEO of StreetWire. Agents will be soon able to update their property statuses on his platform and receive tokens (in a nutshell). Why is this useful? Because blockchain technology can track everything tied to a particular property, saving time and energy while mitigating risk and fraud. He also turned me on to a spectacular idea, and that was being able to verify buyers with a hash number – any potential buyer could be prequalified through their bank, and the coveted prequal information would be sitting on the blockchain for verification through their unique hash number. To any buyer’s agent, this in itself is worth its weight in gold. 

I bet you’re thinking, “Well this is all just great but how in the hell do we implement this in our own office?” Several ways. Once these startups are up and running, there will be portals in place, just like an online database. You wouldn’t need a special IT department with expert blockchain coders or a pool of miners. Other alternatives for smart contracts are AI-based platforms such as Matrix. An agent would be able to enter the rules of the contract in simple language, and the technology codes it on the blockchain.

There are some hurdles, the main one being getting your broker on board. With enough education and real-world applications, I feel like it would be a no-brainer. I’ve taken mine to a couple of blockchain Meetups in our area, just to get the conversation started and for her to meet the people who are using the technology right now.

To delve deeper into the subject, I highly recommend reading The Business Blockchain, by William Mouaygar, or taking the non-technical blockchain course on blockgeeks. And if your company or brokerage is already running its day-to-day applications on the blockchain, I’d certainly love to hear about your experiences!

The Differences Between Crypto and Government-Backed Money

This one is for the noobs again. I like to think of myself as an intermediate noob: I’m not a coder, a miner or even a day trader (I’m a proud Hodler, thank you very much). However I follow the news, check my altcoin investments 35,562 times a day and I have the mad skillz to get my real estate transactions done.

Unless you’ve been living under a rock, you know that Bitcoin has recently BLOWN. UP. My mother and ex-husband called me within 24 hours of each other asking how to buy. Seth Meyers did a hilarious skit about it. A rando friend of mine posted his new Trezor and Bitcoin for Dummies book. Yes, there’s a growing curiosity (okay, more like a frenzy) about how people can get in on the action, and although Bitcoin itself has become a favorite buzzword, the clear majority still don’t have a clue as to what cryptocurrency actually is.

Let’s start with the basics. We all know what government-backed money is, right? Geez, I hope so. Investopedia’s definition is pretty succinct: Fiat is a currency that a government has declared to be legal tender, but it isn’t backed by a physical commodity. The value of fiat money is derived from the relationship between supply and demand rather than the value of the material that money is made of.

So, government backed = centralized. The feds have control over the banking industry as interest rates determine the cost of money borrowed. When the centralized banking system fails (remember the S&L scandal? 2008?) the public takes a major hit. We’ve also seen Greece declare bankruptcy while Venezuela is on the brink. Don’t get me started about the new tax bill – the money that’s been promised to the banks to “stimulate the economy” is mind-blowing. In case you’re wondering where I stand on this issue, you can watch Rachel Maddow’s take on it.

Most banks can’t get behind the idea of cryptocurrency and have been very vocal about it for obvious reasons. Without getting too technical, cryptocurrency is decentralized, and each transaction is recorded onto a transparent, immutable public ledger called the blockchain. We’ll call it community-backed currency, even though the IRS considers crypto an asset/commodity. It behaves like a stock and one can spend, trade or transfer it back to fiat. The thing that irritates me the most is that these Wall Street dinosaurs write article after article comparing cryptocurrency to the behaviors of stocks and fiat trends and try to predict the next bubble while dumping on the validity of cryptocurrencies. They can’t seem to wrap their heads around the fact that yes, while crypto behaves similarly to a stock, IT’S NOT A STOCK, it’s a CURRENCY YOU CAN BUY SHIT WITH.

The Bubble Scare

I just read an article by Jerry Welch, about how crypto fails the duck test, which I think is a ridiculous analogy (he does reference a passage in his book, Back to the Futures, as to how Darth Vader struck down the pin-striped pork bellies known as stock future contracts…starting to see a trend here?), then goes on to compare epic bubbles such as the Dutch Tulip Bubble of the 1630s (!!!), Japan’s real estate market bubble of the 1990s and of course the dot-com bubble, and hints that the crypto bubble could be just as epic of any of those. But he, like so many other old-school finance “experts”, is putting old-school rules like the duck test onto cryptocurrency. No shit does it fail, and keeping in the vein of horrible, over-used analogies, it’s NOT a duck - it’s a honey badger, and honey badgers don’t give a fuck.

And while comparing a nearly 400-year-old bubble to Bitcoin is completely and totally rational (it’s like comparing the Titanic to IOTA), I honestly don’t think there is a Bitcoin bubble and many experts with much more experience than I have will agree. A great point of reference is Lou Kerner’s article. He takes a look at Amazon stock when the dot-com bubble hit and compares it to the overall performance. Still apples and oranges, but we’re at least on the right track. However, I do believe there’s going to be an ICO bubble, but again that’s another article.


If a bank with a centralized server gets hacked, everyone is screwed. Depending on the bank, the FDIC only insures up to $250,000. Anything after that is your loss. The key point here is that centralized banks have centralized systems, and the hacking ease is much greater. Yes, there have been a few exchange hacks over the years but in most cases, the exchanges have been able to give back two-thirds to three-quarters of the fiat back to its customers. There is also the 51% Attack theory, in which if 51% of the Blockchain mining could be taken over with malicious intent to control the network. This would be extremely difficult to accomplish due to the massive amount of computing power needed.

Who Has Control

As mentioned briefly above, centralized banking is controlled by the feds and we as consumers have always been helpless with regards to inflation spikes, interest rates, and so forth. Cryptocurrency, however, is community-based for all intents and purposes and the price is derived upon simple supply and demand. Sure, the price is affected if a country like China speaks out against ICOs and Bitcoin and corrections are made, but once the news dies down then the price shoots right back up. We’ve seen just recently the price of Bitcoin was affected by the holidays – perhaps people were cashing out a little to get the Christmas shopping done, but it’s crawling back up and hanging steady around $15,000 at the time of this writing.

Another little amusing thing is that the old-schoolers in traditional finance love to discredit crypto because it’s based on “nothing.” Let me make it clear that fiat is literally based on nothing. No gold to back it anymore, no real infrastructure, nothing other than what the feds declare. To reel in inflation, the feds put more money into circulation, sometimes flooding the market and driving down the value of the dollar. Bitcoin will never have more added to circulation because it was designed that way. There are 15M in circulation now with 6M in reserves to be added at specific times throughout the life of the Blockchain. The Blockchain is at its infancy and just like the Internet, will be used in various industries over the next few years and will most definitely become mainstream. There are different Blockchains that power cryptocurrencies (Bitcoin which is closed-sourced and Ethereum which is open-sourced), and they’re not going anywhere anytime soon, if at all.

Bottom Line

If you’re going to invest, invest at your comfort level. If you’ve got the stomach to ride the ups and downs of cryptocurrency, then do so. However, I will leave you with this: The 2017 stock market has produced about a 9.7% ROI, while Bitcoin’s 2017 returns have been 1375%, and 2018 will only be better for Bitcoin as well as Ethereum and other promising cryptocurrencies.