ode Banking announced over the weekend, in a story in The Telelgraph, that they intend to list on the London Stock Exchange in as soon as a month. The news can be seen as exciting for most in the cryptocurrency industry as the self proclaimed 'Bitcoin Bank' gains attention and continues to raises significant funds. But what sits under the hood of Mode maybe exactly what has held Bitcoin and cryptocurrencies back - a lack of clarity and trust.

Mode was founded by Jonathan Rowland, son of David Rowland, famous 'Tax Haven' ex-pat and advisor and friend of disgraced royal Prince Andrew. It's been a tough year for the Duke of York, but never far from his side since 2005 are the Rowlands, in a seemingly mutually beneficial capacity. The shear mention of Epstein would send most wealthy, moderately well known professionals running for the hills - Jonathan Rowland sends the prince an email.

In December 2019, while Bitcoin was struggling to hold above $7000, the Mail on Sunday ran an expose on Prince Andrew that was more about the involvement and dealings of Mode's own Jonathan Rowland than the Duke. Currently CEO of an enigma of an entity in Banque Havilland, under investigation by the FCA as recently as March for FX price manipulation, you may think Jonathan has more on his mind than a cryptocurrency wallet, but there is clearly a belief there is money to be made in the world of retail crypto accounts.

As highlighted by the MoS, the Rowlands have been able to use their ties to the Duke to promote the activities of their formerly collapsed and heavily fined bank (Kaupthing offices raided by SFO and Banque Havilland fined $4m) to some of the worlds richest and most powerful businessmen. Taxpayer funded trips to China and Saudi, with meetings seemingly dictated at will by Mr Rowland, have left Prince Andrew fighting for his official royal role just weeks after increased speculation around his connections to Epstein.

Although unlikely to deter many from a project that on the surface seems well put together, the signs are that Mode may well struggle with regulation and compliance, while their position as an unlicensed agent for payments provider Modulr could mean an FCA license may never appear, such is their knowledge of Rowland's past and ongoing business dealings. Therefore if Modulr no longer want the risk of retail crypto payments alongside their fiat offering, what happens to Mode and their heavily invested customers?

How does this effect Mode?

It's unlikely we'll ever know if Mode was part of such discussions in China and the Middle East, although they certainly seem well funded. Such external influence over a consumer facing bank would be of concern to many, especially regulators while the type of investigations under way at Banque Havilland just add to the mystery.

Without a payments license, Mode will remain a middle man for 3rd parties such as Modulr, Celsius Network and Bitgo and may face siginificant regulatory pressure in the coming years, something that any investors in a stock exchange listing would need to be very wary of.

Hopefully Mode goes on to provide a fantastic product to the industry.

Sep 7, 2020
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