Monero Monitor

Episode 9: What is Changelly? An interview with CEO Konstantin Gladych.

17 Jul 20170 Comments

Over the past three years, a wide variety of companies have gotten involved in the Monero ecosystem. Some companies have very public-facing PR groups, founders, or community liaisons, but others have chosen to keep more quiet. Today, I talk with the CEO of a company that to date has taken much more the latter strategy, Changelly. At over two years old, and over a year open to the general public, Changelly is a bit like ShapeShift, though has some notable differences. Konstantin Gladych and I sat down and chatted for a while about his company, their various partners and affiliates, growing pains, and future plans. Give the show a listen and give us your feedback about Changelly.

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Podcast Transcript:

~~ { Introductory Clip and Music } ~~

Mike: Hey, everyone. This is Mike and you’re listening to another episode of the Monero Monitor podcast. Today I’m talking with Konstantin Gladych, CEO of Changelly. For those of you unfamiliar with Changelly, it’s an instant cryptocurrency exchange somewhat like ShapeShift, you could say, but with a few distinct differences. Hopefully today we could talk about some of those differences. Welcome to the show, Konstant. 

Konstantin: Yeap. Hey Mike, hey guys.  

QS 00:35 Mike: Okay, before we talk about Changelly, can you tell us a little bit about yourself? What’s your background and how you got into Bitcoin? 

Konstantin: Actually, I’m about 15 years in the industry, in information technologies industry. I built a few successful businesses for enterprise customers and I just deep-dived into Bitcoin about 3 years ago. So, I made my first attempts on mining for Bitcoin, then with a group I started a few not-so-successful projects and so about 2 years ago, we had started Changelly, like the part of MinerGate team. So, it was developed, there was MinerGate for… MinerGate is one of the biggest Monero mining pools. 

And so, they mine a lot of currencies based on CryptoNote mining algorithm. It’s a lot of currencies and we offered our customers an easy tool to convert them into Bitcoin or any other currencies like Litecoin. Then we have opened our service for all other customers and now we are a separate business. So, we have an independent business team, we have a few developers team, we also have a support, marketing team, business-development and that’s where we are going.

QS 02:10 Mike: How big is Changelly now? How many people work with you? 

Konstantin: Actually, about, I think 15 people. Actually, we have 6 people in our support team. It’s very important to serve the customers very fast and to give them a hand very quickly. So, we have 5 on engineering team, a system architect, administrator, and so a few coders. And also we have a business development team, and some on marketing.

QS 02:55 Mike: Okay. Now, I was gonna ask this later, but you mentioned it, so can you tell us what your involvement with MinerGate has been? Were you part of the founding of that or did you come on to Changelly later?

Konstantin: Yeah, actually I came to Changelly later. So, I know a few guys from MinerGate, but it’s a separate business and separate team for now. And for now, they are just our affiliate partners, one of our affiliate partners.

Mike: Okay, I’ve been trying to get in touch with them, but they won’t return my emails. Maybe you can pass along word that I’m trying to get in touch with them?

Konstantin: Yeah, sure, I can introduce you to MinerGate guys and so I hope that they should be open for some contact, for some interview.

QS 03:53 Mike: Okay, good. Thank you. Okay, so let’s talk more about Changelly, how does it work?

Konstantin: Actually, it’s a simple, instant exchange, so we are giving our customers some kind of an estimated rate. So, for instance, if you want to exchange 10 Bitcoins to Ether and you have 10 Bitcoins on your own wallet, and you also want to get Ether on your own wallet (like MyEtherWallet, Myst, or any other kind of wallet), and you don’t want to give the money to an exchange, and you don’t want to store money on the exchange, yet you want to own your money…

So, actually you go to Changelly main page, you just make a quote on how much will I get if I exchange 10 Bitcoins to Ether. Then you can follow the instructions, like okay, I want to get Ether on my wallet, so you just specify the wallet address and we give you the Bitcoin address to deposit money. So you can deposit any amount you want, so if you deposit 10 Bitcoins or 20 Bitcoins or actually, we exchange all the amount at the best available rate. 

We do it quickly, after the first confirmation of your payment in the blockchain and actually we are providing trading on Poloniex, Bittrex and few other small exchanges that we have integrations with. We have our corporate verified account there and dedicated support line. 

So, actually we are taking counterparty risks on our own side. So actually, our trading algorithm brings the big amount to infuse more orders and trades near the spread. So we have a trading bot and we have API connections to Poloniex, to Bittrex, and we are providing trades there. We just charge a small commission for that, it’s a percent, 0.5% for each exchange and we are showing it for our customers. I think it’s pretty clear? 

QS 06:08 Mike: Yeah, that sounds a little bit like how I imagine ShapeShift to work. Now, one thing I noticed that’s different about you and ShapeShift is that it seems that users need to sign up for an account on your site. Is that true and then why do they need to do that?  

Konstantin: Actually, when we had started our business, we were thinking along about do we need to ask some account information or we shouldn’t ask, and in the final end, we have established that you should have an account and we are asking you for an email of some kind, probably a social platform, depends on you. But we don’t require the confirmation of that email, and if you want to exchange anonymously, you can use any fake email if you want. And we’re never asking you about any kind of personal details.

So, some customers are asking us, “Why should I have an account when on ShapeShift I don’t have an account?” But, I believe it’s a good reason for support. If you need support, you just send an email to our support, email request and we can check all your transactions history. So, we see all your transaction history from your account and we can help very quickly with that if you want to refund or do something else. 

Actually, we have a lot of users that are using Changelly every day with a big amount of money to trade and they have all the history in their account. But we never ask for any personal details. 

Mike: Okay, so I went through and noticed you have a lot of coins listed, more than ShapeShift, so that’s definitely something that makes you stand out. But some of them are really like strange coins I’ve never heard of. For instance, Fantomcoin, I don’t know what that is. But just, in general, how do you as a company determine which coins you want to list and which coins you don’t list?

Konstantin: Yeah, thank you for your question. Also, a lot of our partners are asking us to add coins and just spamming our emails, our Twitter, “Add my coin, we will be big soon, we have a great community.” As for some rarer coins, some not-so-popular coins, it’s miners by MinerGate. And as we are the biggest affiliate partner with MinerGate, so we just let their users to exchange those coins too.

As for your question about how we choose coins, we do this investigation about the potential of the coins, is it like a Bitcoin fork? Okay, if it’s like only a Bitcoin fork, is there any kind of real business integration? So, probably it’s useful to buy some special goods or in the gaming industry or some casino industry, so if we see any kind of potential, business potential for those coins… Okay, we just start to talk with the community guys, and we look at, okay, how can it be useful in the future for some kind of real business. 

And another thing that we always see is the exchange volumes on CoinMarketCap, you can check all of the volumes of the exchanges and also CoinMarketCap is our biggest affiliate partner and we know every statistic, on requests, on clicks, on CoinMarketCap, so we can understand the potential demand for the coins. 

The next thing what we always check is the community, so we are checking Twitter accounts, Facebook accounts, some kind of reddit. And also, we’re just checking Slack community, is it active or is it just a lot of people and they don’t post anything, so it should be boring. 

And the last thing, as our main exchange partners are Poloniex and Bittrex, so the coins should be listed there. Also, we are thinking about integration with Kraken guys, so we are in close contact with Kraken, and Bitfinex, so it’s an interesting situation. If you check all the market, for probably one year, all the trading volume was on Poloniex, and now, some new coins are usually unknown still on Bittrex and for the last few days, I see that some new coins are on Bitfinex, like IOTA and on Kraken, EOS. So, I see that the exchange market is becoming more decentralized for different companies I believe. 

QS 11:42 Mike: Yeah, I think that’s a good thing for the space in general to not be reliant on just Poloniex. Okay, one other thing I noticed about your company is that you have a way to convert fiat to currency, and I believe coins to fiat as well, so specifically, you can deal with dollars and euros. That’s not something I’ve seen from very many other companies in this space, can you tell us how you were able to do that?

Konstantin: Yeah, it’s also a good question. We have integrations with a few bank card processing partners and they are doing all the KYC, payment verification, and they are taking chargeback risks on their side. They are just sending us Bitcoins and we are just converting Bitcoins via our main trading algorithm to Ether, Monero, and each of the 50 listed coins we have.

So, it’s not a big volume, not a big exchange volume, but most of the community like us for that option and they say to their customers and their users, “Okay, guys, you can buy for dollars or for euros our new coins there.” Yeah, that’s great. I think it’s mostly about marketing for now. 

QS 13:18 Mike: Okay, are there any extra regulatory things that you need to worry about as part of that? You said that the banks are handling all the KYC and everything, but on your end, do you have any extra things that you have to keep track off in order to accept fiat currencies? 

Konstantin: Actually, we don’t track any personal data and all the KYC is done by our partners. And so they are responsible for the risks.

QS 13:47 Mike: Gotcha. Okay, so you’ve been a company now active and live for over a year, how many people do you see using your platform and do you know what parts of the world do they primarily come from? 

Konstantin: So, actually, all the information about our visitors you can check on the web, of course it’s open data for any kind of person. I’ve seen the statistics, we have about 4 million unique visitors for the last month and so we provided about 200,000 deals, in June, exchanges… Exchange volume is about 2,000 Bitcoins daily, so actually we are doing about 50% of our main competitor, ShapeShift. Yeah, that looks impressive and for all the people that are just asking us, “What is your exchange volume?” And we just answer, okay, 2,000 Bitcoins daily. 

QS 15:09 Mike: Okay, what is the most common trade? 

Konstantin: The most common trade is similar to any other altcoin exchange like Poloniex or Bittrex, of course it’s from Ether to Bitcoin, it’s the most popular. But actually, when some currencies are rising up like some whales are pumping Litecoin or pumping Ripple, and a lot of people are just following the trends and buying that currency on Changelly.

And we have some kind of competitor advantage, so you can exchange really big volumes. So, we almost have no amount restrictions for exchange, and this is why we have a lot of big regular customers and they’re exchanging from 50 Bitcoins to Ether, and then from 1,000 Ether to Litecoin and next, next, next. 

QS 16:09 Mike: Sure, okay. I reached out to a number of chat communities that I’m part of and I was looking for people who have experience with your site and I think it’s probably that the communities I’m part of just don’t have a ton of experience using you because I found a few people who had some things to say about successfully using your platform, but not a ton. And so with that in mind, can you talk about why somebody who’s listening to this podcast should trust your service enough to go and try it and kind of talk about why your company is or is not at risk of stealing somebody’s funds as they’re trying to use the service? 

Konstantin: So, this is a good question. We don’t have any kind of aggressive promotion for Changelly, and so in Spring, market was booming and that’s a lot of exchange volume going through all the services and all the services were under the high pressure because we have grown so many times this year, and so this is why we are really not actually doing some kind of aggressive marketing, because it’s enough for us.

We’re just working on stabilization of current business. So, we are just promoting other services like CoinMarketCap, CoinGecko, so we can find our buttons there and we are also going to integrate with a few wallets. So, I think that’s the reason that not too many people heard about it, but it’s a funny thing that I’ve been on Consensus conference in New York in May and I’ve asked many people about, “do you know us?”, and each second person asked, “Oh, guys, I know you, oh guys, I’m your customer, I have exchanged a few coins on your service.” And it was pretty impressive.

QS 18:19 Mike: Okay. Your Tweets during Consensus are actually a part of how we ended up getting this call together. Kind of along those lines, I remember hearing about your company when it first was started, but then I kind of just dismissed you because you were new and I wanted to see what would happen. But you’ve popped back up recently.

First I saw an article in Forbes Magazine that mentioned a new company called ChronoBank, which I don’t know what that is, but they apparently have integrated your service, and then more recently, I saw that Charlie Shrem has joined your company as an advisor. And then you just mentioned that you’ve integrated with some wallets, specifically the news that has been popping up lately is your collaboration with Jaxx Wallet.

So, it seems like you’re growing in some of this attention in the last maybe 6 months, but can you talk about what it has been like as you have started developing these collaborations?

Konstantin: Yes. We are working on new integrations. We are working step by step and it’s a rather long process because most of the wallets already have our competitor, ShapeShift, but there are some competitor advantages of Changelly, it’s slightly better rates, no amount restrictions, and so, actually, I believe that it’s always nice to have an option. And when we have started partnership with Jaxx guys, we are discussing a lot, and they say, “Okay guys, sometimes ShapeShift didn’t work and sometimes you provide better rates and it’s always nice to give an option.” Monopoly on the market is always bad for the market and it’s always nice to have an option for a few different services. 

So, actually we did a few integrations previous year with Nem XEM official wallet, with Freewallet, it’s a multi-currency wallet, and now we’re in the process of integration with Coinomi wallet, so it should be released, the new version of their wallet and there should be two options for exchange. Jaxx should have the same option and also we are in connection with a few other wallets, we are in good contact with Wirex guys and a few others. Now, existing connections are with CoinPayments, CoinPayments service, and with a few smaller business that are providing Bitcoin debit cards and they also accept altcoins through Changelly. 

QS 21:33 Mike: Okay, thanks. How did you meet Charlie Shrem and is that relationship part of what has driven the work with Jaxx now? 

Konstantin: So, it’s a funny situation. Last summer, it was started a new project, from Ned Scott and a few other guys and we just realized it can be a rather new service with a lot of new customers to the crypto-industry and of course, we have integrated Steem and Steem Dollar currency to Changelly. And we have started a few articles on Steemit for the promotion of our service and we got a few customers for Steemit and the community actually like us. 

So, Bitshares community, they really like our service and they always exchange Steem or some kind of other coins. And few months later, I see Charlie, Charlie’s article like the Geek and the Prison. He made a few different posts about that and the last post was about “Why I shouldn’t use Poloniex or Bittrex.” Why I should use some instant exchanges and he mentioned block trades from Steemit and he had mentioned ShapeShift and he has mentioned Changelly. And he leads a huge exchange of Steemit to Bitcoin on Changelly. So, I’ve got his email and I’ve just wrote him, “Oh, Charlie, you are the famous person in the crypto-industry and we are looking for some kind of advisor, business development advisor.” 

And Charlie has answered in 10 minutes, like, “Oh guys, I like your company, let’s have a Skype call.” And next day we had a Skype call and we discussed all the conditions and we asked Charlie to introduce us to other services, to other wallets, and so Charlie made a lot of great jobs for us. Concerning Jaxx, I know that Charlie is a good friend with Antonio Di Iorio, the founder of Jaxx, and they spent a lot of time together in Miami. And so as we’re located in Europe and Charlie is located in America, Charlie decided to join the Jaxx team on full-time, but he’s still our business development advisor. So, we have regular conversations with Charlie and actually, we are good friends because he visited Europe, I have visited America and we spent a lot of time together. 

QS 24:40 Mike: Okay, that’s nice to hear. So, I have one follow-up question about your wallet integrations. I’ve read online a number of places where people have said that their funds have gotten stuck and then they have to reach out to you and it takes hours or days, and you sort of mentioned this as well… One of the reasons you have the email address is in case you need support. But as you think about integrating your service into these wallets, what types of things do you need to consider with how you’re going to be able to continue to provide support and how’d you prevent it from just becoming a really big time-sink for you?

Because I imagine, as wallets stat to integrate your service, then that means more volume, and the more volume there is, then the more likely something might happen that would go wrong. So, can you talk about precautions you’re taking there? 

Konstantin: Yeah. It’s a good question for us. And we already support a few wallets and so for the integrations, we have a dedicated support line. Like, we have a chat, Skype and Telegram with those wallets’ support. And for them we’re going to build some kind of dedicated support in general, some kind of dedicated emails and actually, we always have an option to identify transaction for the hash number and all the wallets see all the transactions from their customers in their affiliate partner interface and they can check the status. 

And so, they can provide the first-line support for their customers by themselves. So, if they see some kind of transaction hash, transaction is finished, they can find the transaction in blockchain and they can say, “Okay, guys, your transaction is finished.” Or, “Okay guys, your transaction was delayed due to Changelly having some issues.” Or whatever. So, each service in the industry can have issues unfortunately, and sometimes it happens.

If you check our reddit or some kind of Facebook probably account, unfortunately we had a lot of complaints in May when the market was booming and nobody in the services was ready for that. And actually, it’s not just, “Okay, market is growing and that was doubled and…” Some day we have grown 10 times for a week, and when that started, the market started to grow, we just said, “Okay guys, we need to hire more people to our team to help customers quickly.” 

And we have just started to find the new people, we have started education for these people, but market has grown faster than we can expand our team. It’s not like just plug in the new server, and buy the new server, and buy the new server, it’s all about the people.

QS 28:12 Mike: Right. Okay. So, you mentioned earlier that your company does not do a lot of marketing. I think if people search for your company, then can find a few articles about you, but by and large, not a lot, and tied with that, it seems like you don’t have that big of a social media presence, although more recently I’ve noticed you’ve been more active on both Twitter and reddit. But why have you chosen to kind of stay quiet and maybe more recently less so, but rather than trying to become some integral part of the various coin communities where people can get to know who you are? 

Konstantin: That’s a good question. Previously I preferred not to be like some kind of public person in the industry. And so when I dropped to the industry, we have started to grow our business and so actually I don’t have enough time to make posts, or Twitter, and now I’m trying to find more time for that. So, I know most of all the people in our community personally, for instance, I know Fluffypony.

Mike: Yeah, I saw a picture of the two of you, it looked like you were getting drinks or something together at Consensus.

Konstantin: Yeah, yeah. And we also have had Skype calls, and I met personally guys from Dash, so I know Vitalik from Ethereum personally. I know most of our partners personally. But, I believe I will find more time to make some personal promotion on Twitter or reddit. I’ve just focused on my business and all the processes. Actually, I believe, I know that presents for public persons are always good, but first of all, you should provide a very good service for you customers. And if you provide the best service, so your customers will recommend your service to each other, and so that’s all about reputation and about the service for customers.

Mike: Yeah, you know, it’s interesting you say that because in a lot of ways, that has sort of been the mentality of a lot of people around Monero. That, you know, kind of let the code speak for itself, let the service speak for itself and don’t get too excited about marketing. It’s interesting to hear that you maybe have a bit of the same philosophy with you company. 

QS 31:09 Mike: Okay, I’ve only got a couple of questions left, and I think we’ve covered your company pretty well, but I wanted to talk about some of these partnerships that you’ve mentioned as we’ve gone through this. And so, specifically one that popped up at me is Freewallet. You mentioned how you have integrated into Freewallet… what is your partnership with them like? 

Konstantin: So, yeah, we’re providing the instant exchange API for that wallet and people can exchange coins inside the Freewallet with the Changelly API. So, they get to buy Bitcoin accounts with Ether or buy Ether with Bitcoins inside that wallet. It’s similar to Jaxx wallet I think, so as many wallets. On Coinbase you can exchange Ether to Bitcoin or Bitcoin to Ether. 

QS 32:04 Mike: Okay, so, the thing that has me curious specifically about them is that Freewallet is different from Jaxx in that they are a custodial wallet. And so they actually hold the user’s keys, which is troublesome to me because it’s sort of against the purpose of cryptocurrencies. You know, the whole idea that people should hold their own keys and be in charge of their own money is part of what drives the whole business.

But more specifically to you is if Freewallet holds everybody’s keys, couldn’t they just kind of on their own database do these swaps for people? I guess I don’t see where your company or ShapeShift or anything like it would even be an advantage for them. Do you know anything about how that integration works? 

Konstantin: Yes, I know. It’s working pretty similar like our service, we just give them the addresses to send coins for the Freewallet customers. I think again, they can build their own exchange, but they should manage integrations with some kind of exchanges because if you provide service for your customers, you should have some order book and you should set orders for exchanges and so it’s better to trade on Bittrex or Poloniex for now if you want to get the best trades.

And of course, if you have a lot of customers, and I know that Coinbase have a similar model, they also own your private keys, so they have their own exchange, but the customers also can trade on that exchange, and so they have big exchange volumes there. Actually I can’t say for the Freewallet business model, we are providing exchange for them, exchange option.

QS 34:23 Mike: Okay. Now, I’ve read some places that Freewallet is tied to MinerGate and other places where people have said, “No, it’s a separate company.” Since you sort of have these connections with MinerGate from Changelly, can you answer this question once and for all, is Freewallet associated with the rest of your companies or is it totally separate?

Konstantin: No, actually it’s a separate company. It’s only our partner among many other partners.

Mike: Okay. Are there any other companies that are together with MinerGate and Changelly that are kind of in that same umbrella? 

Konstantin: So actually, as for now, as I previously mentioned, we have a separate business and so we have a separate company, and even the separate company and separate management team. So, it’s about partnership. So, most of other companies are partners as well.

QS 35:38 Mike: Okay, okay. So, then, the one other relationship I’m interested in, you mentioned CoinMarketCap and you mentioned CoinGecko, I believe that those two companies are owned by the same entity that owns CoinTelegraph. Do you have any relationship with CoinTelegraph or are you specifically interacting with CoinMarketCap and with CoinGecko and some of those companies? 

Konstantin: So, CoinGecko and CoinMarketCap are our main affiliate partners. I know personally Chris from CoinMarketCap and he’s a founder of CoinMarketCap. And actually, I don’t know who are the owners of the businesses … So, I believe they are owned by their founders. And I know Bobby from CoinGecko, you can just send him email and ask for some kind of interview if you want. 

Mike: Okay.

Konstantin: So, actually we are paying commission on each registered customer from the users, from their visitors.  

Mike: Okay, yeah. I’ve noticed that CoinMarketCap has your service just integrated right into it. So, when somebody is looking up the price of Dogecoin for instance, there will be a little button that says “Instant Exchange” and it connects to your service. Was that a partnership that you initiated or was that a partnership that CoinMarketCap initiated? 

Konstantin: So, it was initiated by me personally one year ago.

Mike: Okay. And have you seen a lot of volume from that? Is that something you track, your sources of volume?

Konstantin: Yeah, actually a lot. 

QS 37:30 Mike: Okay. All right, then with that, I just have one last kind of question for you. Do you have any big future plans for growing Changelly or new services that might get included as part of it? 

Konstantin: So, yes, we have a few ideas for the new services and we are just building some prototype of a new decentralized exchange service. Unfortunately, I can’t disclose all the details right now, but some kind of big announcements will be soon and yes, we have a lot of plans because we have a pretty strong brand, we are known in the community, and if we build something, a new service, we can easily attract new customers from our current existing customers. It’s our advantage for starting new projects.

Mike: Okay. I can appreciate the need to kind of keep quiet about stuff until you’re ready to launch. All right, with that, I think I’m just about done with my questions. Thank you for coming on the show. Would you like to tell people how they could get in touch with you?

Konstantin: So, you can find me on Twitter. You can just mail me, so it’s… Actually, we have a common email on Changelly, like [email protected] and so it’s supported by my personal manager. So, you can easily reach me on any social media. 

Mike: Okay, yeah, that’s actually how we got in touch initially, I think too, it was the Changelly, maybe the official Changelly Twitter I think, I can’t quite remember. 

Konstantin: Yeah, yeah, yeah. We are pretty open on all the social media accounts. You can ask us any questions, so we are answering regularly also on reddit, on Twitter, on Facebook.

Mike: Okay, and then do you have anything else that we didn’t talk about, that you thought maybe we should, anything you’d like to add? 

Konstantin: Oh, Mike, thank you for such kind of interview. You have asked a lot of interesting questions. And you’re welcome to Changelly. 

Mike: Yeah. Well, thank you for coming on and answering the questions that I had. And I’m sure there are more questions that more people will have, and so I encourage you if somebody else reaches out to have another interview with them. 

Konstantin: Yeah, once sentence that I want to add, I just want that more newcomers of Monero community… I believe that we have a pretty nice service for exchange and so I hope more people in Monero community will like that. 

Mike: Okay. Well, with that, for anybody who’s listening, you can find me on Twitter. Just look for @MoneroMonitor and you can check out our website, And what do you say, let’s call it a day?

Konstantin: Yeah.

Mike: All right. Have a good one, everybody, and thank you, Konstant. 

Konstantin: Thank you very much, Mike.

~~ { Closing Music } ~~