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ZEN Corporate Account Rejection for VASP - Advice and Next Steps?

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IbnAlKhattab

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Aug 31, 2023
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Hello everyone,

I recently faced an issue while trying to open a corporate (trader) account with ZEN for my newly registered VASP based in the Czech Republic. I want to do P2P trading and ZEN supports that.

Despite my efforts, the application was rejected by their compliance team without a detailed explanation.

Here are some possible reasons I suspect for the rejection:

  1. Newly Registered Company: My company is just a few weeks old.
  2. No website: Initially, we didn't have a website, privacy policy, T&Cs, or contact page, but these are now set up.
  3. Inactive Social Media: Our social media accounts were set up but had no posts at the time of application.
  4. KYC Systems: At the time of applying, we hadn't fully set up our KYC systems.
  5. Risk Appetite: I might have provided answers that didn't align with their risk criteria, but without knowing their expectations, it's hard to say.
I've addressed points 2, 3, and 4, but obviously, I can't change the fact that we are a new company, and I'm not sure what specific responses they are looking for regarding their risk appetite.

My questions for the community are:

  • Why do you think ZEN might have rejected my application?
  • Is it possible to reapply, and if so, what should I do differently?
  • Does anyone here have experience with ZEN or similar institutions? I'm looking for recommendations for trusted service providers who specialize in handling high-risk accounts like those for crypto P2P merchants.
Any insights or advice would be greatly appreciated!

Thanks in advance!
 
2-4 are more than enough to be⁣ rejected; but I'll add some more points:

What is the company's director(s) and UBO(s) residence⁢ and citizenship?
If different from the Czech Republic, how you have explained the reason for︀ incorporating just in CZ and applying just for Zen?
Without knowing the questions and answers, it︃ is impossible to comment 😉

See above.
In theory, yes – but I do not︅ much recommend to do it. You apparently have created a quite bad record for you︆ (sorry but it was really unwise to apply having flaws like /2/ and especially /4/,︇ the chances for onboarding were literally zero) and it is IMO remarkably better to begin︈ from the scratch – with another provider or another company (i.e., create a new one).︉
See above...︊
I have but frankly, not with accounts for crypto P2P merchants. I am only well︌ aware that P2P is really a problem for the majority of financial institutions...
 
Thanks for replying︃ so quickly.

Yes my citizenship is different from the Czech Republic. Can’t really do anything︄ about that.

As for reapplying, I really have nothing to lose at this point, so︅ I might as well just do it.

Really dumb mistake on my part not setting︆ up 2-4. Is there anything else I should keep in mind?
 
Do you have a team and office in CZ? Substance is important.

Are you MiCA‌ and travel rule compliant?

Do you have a good MLRO and compliance framework in place?‍

When Zen says no, they are rarely open to revisiting the decision, at least until⁠ there have been some drastic improvements.
 
You are welcome.
Sure; you can hardly do anything re: this at this moment.
The background of my question is that some countries are considered ”toxic“ by Zen and your⁠ chances to be onboarded in such a case are close to zero regardless of anything⁤ else.
So, if you share the company's director(s) and UBO(s) current residence and citizenship, I⁣ (or someone else here, my knowledge is far from being complete) can be able to⁢ tell you whether it makes sense at all to apply or whether you would just︀ waste your time and energy...

Yes, I can confirm this. (It was the background of my recommendation.)
 
Well, you have not shared your residency country; but regardless of this: regrattably, Zen‍ does not welcome (or at least did not welcome) applicants/directors with Turkish citizenship. Tested repeatedly.⁠
You can check the situation by trying to apply for a personal account; generally it's⁤ quite easy with Zen and the procedure is uncomplicated. If you succeed, it means that⁣ they have changed their policy at least a bit and you can go on; if⁢ not, do not waste your energy and search for another provider.
I am sorry that︀ I cannot convey to you any more positive news 🙁
 
I think @Sols summed this up in a great way.

One thing I will say‌ is that Zen is near the easiest option for VASPs. So a rejection with them‍ sets a bad precedent/expections for your future applications.

An important question to ask is whether⁠ you, as the only corporate member, have financial experience. An EMI or bank will definitely⁤ not want a VASP that has no employees skilled for AML.

I cannot confirm if,⁣ as @Forester said, Turkish citizens are not welcome at Zen. I know that they are⁢ friendly to most jurisdictions but they can be a bit picky sometimes. I have spoken︀ to somebody with Egyptian citizenship and residency + Czech VASP and they didn't have an︁ issue getting onboarded to Zen - although obviously had functional KYC, employed a local MLRO︂ compliance officer in CZ and were able to answer questions about the project.

MiCA does︃ not yet apply in CZ or LT but the places are getting ready for it,︄ and EMIs might be getting stricter with VASPs that seem unready to comply with the︅ new regulations (which are not at all friendly, but everyone has to comply nevertheless).

If your KYC and AML systems, FAÚ reporting, internal policies and internal audit systems are prepared,︆ try another friendly EMI like PayDo or Collect&Pay - see if you get accepted there.︇ I would not reapply to Zen so quickly, it could be suspicious to them and︈ I would not expect so much success. You would also be better off not mentioning︉ P2P - as a company listed on P2P like Binance, you will still have to︊ be doing KYC and AML on your clients and effectively performing classic crypto exchanging, just︋ on another platform.
 
Try going through an approved intermediary. The process is quite diffetent. It may be a‌ matter of a few email exchanges and a few calls for the intermediary to clarify‍ all your quedtions and whether there is possibility to get an approval.
 
Does Zen use intermediaries? Maybe for this specific client niche yes, I do⁠ not know; just generally I am not aware of it (at least not on the⁤ regular basis).
(But my knowledge is far from being complete 😉 )

Or are you speaking⁣ not about Zen but generally? From the general point of view / as a general⁢ methodology you are of course completely right.
 
I am speaking about Zen⁣ in particular. There is an approved intermediary scheme. If I am not mistaken, it only⁢ applies for corporate accounts. We have done a few.
 
Zen is a big time waste if you ask me, even the most simple business‌ which they don't understand they reject. Wise and Revolut approved business for years!
 
ZEN Business rejects nearly everyone, they rejected me and all my friends, our business sector‌ is not high risk, we applied as european companies
 
Well... I witnessed opening accounts⁤ with Zen 4-5 times in the last couple of months. It is true that there⁣ are some moments during the process when you must think carefully (or know 😉 ) what⁢ they want to read and what you should do; but if you are able, I︀ do not see it as an unresolvable problem – on the contrary. In one case︁ I advised my friend not even to try, as it seemed to me as a︂ waste of time; but otherwise, success rate 100%...
That's why I believe @CyprusLawyer101 here ZEN Corporate Account Rejection for VASP - Advice and Next Steps? – if someone knowledgeable is︃ helping you, you are playing another game.

Well – if you possess some specific knowledge how to make︅ them long-time happy, then it really can work for you AND you are a lucky︆ man AND I look at you with a deep respect 🙂
 
Can you share some insights how to︃ get approved to Zen business with VASP license as a crypto exchange?
PM me if︄ possible
 
To be‍ honest, I do not think I am the right person for this advice – this⁠ is not a standard business account opening but a specific task; and I admit I⁤ am not engaged in the crypto business, so my knowledge about all concerning the exchanges⁣ is limited.
I'll PM you to check the basics, probably tomorrow (European time) as I⁢ am a little busy today; but do not expect much...
 
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