There are 7 categories of concern to a Cryptobanker that are already being modeled with physical systems in place in every Pawn Shop; CUSTODY of the real goods and the cash held at the counter and in a safe in the back office CLEARANCE risk policies in place, often ONLY accepting Cash for payment on loans and for some even real goods. Trusted Communications systems established to price the market value of items collateralizing Fiat Cash loans. COMPLIANCE protocols and documentation procedures in place to verify identity of both Sellers and Borrowers. CREDIT licensing in place as providing lending services is one of the main market drivers for profits Physical SECURITY systems with alarms and bars on the windows and doors with staff armed and trained in defense applications, all mirroring tactics needed for Crypto or Cyber security operations OTC operational security protocols already established to verify proof of control of the assets and authenticity of assets to be collateralized.

1. A Crypto Pawn Shop case study…
Retail OTC sales, purchasing, and collateralized lending of Bitcoin
This Photo by Unknown Author is licensed under CC BY-NC-ND

2. Collateralized Crypto Loans
OpSec for a
CRYPTO PAWN
SHOP

3. A crypto-pawnshop
use-case-scenario
As Pawn Shop owners are
basically street-level
professional traders, taking
advantage of cryptocurrency
trading is a natural next step
in their operations.
By collateralizing real goods and charging a “privacy premium”, as is
standard for retail OTC of Bitcoin, with spread fees ranging from +8% to
22% at some BTC ATMs. Providing this service to the marketplace can
bring in additional customers and allow for a new income stream on the
spread fees for retail Spot delivery of the digital asset.
But these operations also create new risk exposures and require going
through a learning curve regarding the 7 crypto-seas; custody, clearance,
communications, compliance, credit, cybersecurity, and countertop
OpSec protocols.
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CryptoPawn Shop

4. Problem
Volatility and liquidity are major concerns that require
solid solutions, after compliance, custody and security
have also been addressed.
 The high volatility of Bitcoin prices can cause reserve
capital to rapidly lose purchasing power
 Rapid price movements can easily eat up any profits
while waiting for Spot on-exchange purchases to close
when purchasing from a bank account.
 Fears of capital losses and retail profit margin shrinkage
due to volatility are making the majority of storefront
owners hesitate to enter the crypto-trading realm.
This does create a first-mover advantage opportunity for
those willing to take on these risks and learn how to use
these crypto-trading tools, before their competitors do.
It is no longer a matter of IF, only of WHEN, these
cryptotrading operations become available to the masses.
The question is,
“Who will tap into these blue waters 1st…?”
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5. Solution
 Understand how to operate a self-hedging strategy in
order to maintain the capital value of BTC reserves held
available for lending, using both precious metals and
derivative contracts with leverage provided on margin.
 Time delays in making exchange purchases of BTC from
a bank account require a highly leveraged and highly
liquid trading platform to insure against volatility risks
eating up the profit margins acquired in the retail
spread fees.
 Compartmentalized and dedicated trading accounts for
each tactic can help track and separate;
1. Short positions that are hedging the
value of reserve account holdings.
2. Long positions that are covering the
volatility fluctuations occurring while
restocking reserves dedicated to Spot
retail sales.
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Crypto Pawn Shop
Pawn Shop owners, operating the 2nd oldest profession in the
world have already been managing self-custody and self-
verification in a trustless environment, adjusting for market
fluctuations with variable spread fees on precious metals. Adding
Bitcoin, the reserve currency of the crypto realm that is
functioning as a form of “crypto gold” standard, as an
uncorrelated asset to their portfolios is almost inevitable, …

6. The Cryptobanker’s categories of concern:
As everchanging, uncertain, and unsupervised international “waters”, safe operation requires, before
anything else, an investment in education. 7 tool categories are needed by a Cryptobanker, Trader,
and Investor, each category of concern having its own hardware, software, platform/s, and account/s
needed for operations.
1st Sea of concern : Custody
Hot and mobile, hot/cold and back-office, cold and air-gapped, as
well as frozen and hidden wallets. Backed up and tested them all…
2nd Sea of concern : Clearance
How fast and how certain depends on how known, how trusted, and
how fast; speed comes with a price that must be accounted for in the
margin, as does the risk of fraud placing a price tag on certainty.
3rd Sea of concern : Communications
Secrecy is security when money is speech, making encryption and
discretion in all communications necessary as the 1st line of
defense of one’s digital assets.
4th Sea of concern: Compliance
Prophylactic documentation, jurisdictional tax competition, and
regulatory uncertainty all need to be studied and addressed in the
right order, in the right ways, at the right times, or there can be
serious legal consequences.
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Crypto Pawn Shop

7. As everchanging, uncertain, and unsupervised international “waters”, safe operation requires, before
anything else, an investment in education. 7 tool categories are needed by a Cryptobanker, Trader,
and Investor, each category of concern having its own hardware, software, platform/s, and account/s
needed for operations.
The Cryptobanker’s categories of concern:
5th Sea of concern ; Credit
Borrowing cryptocurrency with a collateralized asset can allow
Spot Spread Fees to be added to the interest payments earnings to
create 2 margins to profit from, each with its own risk variables.
6th Sea of Concern ; Crytpo-security
Data defense begins with the discretion with the spoken word, is
important to maintain air-gapped on paper or metal sometimes,
and if digitized must be recognized as written there for all time
and under constant scrutiny for openings in one’s operational
security.
7th Sea of concern ; Countertop OpSec
Proof of assets and identity can be very simple for face-to-face
physical transactions in a controlled environment.
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8. The 2 main concerns after OpSec are :
Price slippage due to short and mid-term volatility is inevitable in a relatively small pool of
capital, as is the current total market capitalization of cryptocurrencies. Managing those
concerns on both timetables requires active implementation of tactically applied tools.
Short-sell to hedge
investments against long
term volatility
Using high-leverage on platforms
with minimal fees, a short
position is taken matching in size
the Spot holdings, as a means of
nearly eliminating downside risk
of loss of capital purchasing
power due to price volatility.
Taking the “breaks off of losses”,
IF the Spot price moves above
initial entry price levels.
Buy-long to protect arbitrage
profits against short-term
volatility
Time delays when moving cash
through bank accounts into
exchange accounts cause
volatility that can reduce Spread
Fee profit margins.
But this is manageable by using a
leveraged account to immediately
re-stock the assets that have
been sold for a premium above
Spot prices in a retail OTC
transaction.
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9. CryptoBanking and CryptoTrading, are the Yin and Yang of navigating
the Crypto Realm, when integrated and balanced they create confidence when
riding the waves of volatility…
Strategies, tools, and tactics
for secure operations as a
CryptoBanker and
CryptoTrader for both
investment and speculation.
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Crypto Pawn Shop9
Long-term strategic planning is required to manage the operational risks inherent
upon the crypto seas. Trust is to be constantly be tested and proven, through the
application of “Verification, not Trust”, as the “1st Rule” to remember. The one
rule to rule them all.
Put into practice this becomes “Do Your Own Research”, and “Trust No One, but
yourself + 1” meaning keep all information strictly “Need to Know” and “Back
everything up, immediately because 2 is 1, & 1 is none.”, as well as the concept of
“Not your keys, not your crypto”.
Always keep self-custody of assets as the standard method of operations.

10. Think like a Cryptobanker
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Crypto Pawn Shop10
Long term strategic planning implemented with tested and tactically chosen tools used with discipline,
applying principle based operational security protocols to digital self-defense.
Tactical
Implementation
Implement strategic operations
using current software solutions
on the hardware tools now
available, as an evolving ‘best
answer at the moment’ for
managing the risks inherent in
each category.
Tool selection
Everchanging solutions are
spread across a massive sea of
information, and require constant
live monitoring of public and
private channels, as well as
perpetual updating of the
hardware, software, and the
platforms to trust.
Strategic Planning
Establish principles to follow as
operational security protocols
organized in a documented
checklist in a specific order of
operations.
And strengthen the human
element that is most often the
weak link in blockchain banking
operations. Develop discretion as
a habitual means of protecting all
data as if it is a capital asset.

11. 1st Category of Concern; Custody
Whether Buying, Selling, Speculating, or Trading safe custodial solutions needs to be in place to protect the digital
assets to be stored in virtual vaults. Diversification and compartmentalization help to layer one’s digital defenses.
Mid-term Tactics
• Password creation and management
protocols in place and strictly adhered to,
with tracking documentation systems.
• Physical multi-factor ID practices as the
standard protocol for dedicated device
access.
• Factory purchased, hardened, and
dedicated crypto-banking devices used for
trading and storage operations.
Long-term Strategies
Compartmentalize virtual vaults according to the
amount of value and the surface area exposed to
risk. Layer 4 degrees of security, each with it’s own
designated operations and value thresholds.
With Hot, Hot/Cold, Cold, & frozen private key
storage, all backed up and tested with MFA
required to gain access to each vault (i.e. wallet).
Diversify:
• In all things (physical, paper, and digital)
• in all ways (public and private, liquid and
frozen) and
• in all places (at hand, within reach locally yet
off-site, and remotely accessible in
internationally varied jurisdictions)
Short-term Tools
• Hardware for Hot, Cold, Frozen, and
Buried vault ‘wallets’
• Software integrations between each of
the hardware devices
• Curated ‘white-list’ of trustworthy out-
sourced custodians for protecting long-
term investments and platforms to use
for short-term speculation and hedging
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Crypto Pawn Shop

12. Implementing long-term strategies individually and as an organization can facilitate real world testing of short-term
tools by using disciplined adherence to mid-term applications of a tactical approach to risk management.
2nd Category of Concern; Clearance
Mid-term Tactics
• Select escrow service providers “as
needed” according to the existing
levels of trust and experience with
counterparties
• For high volume, fast, low-value and
trustless transfers use public address
privacy tools.
• Protect Spread fee profit margins
with leveraged arbitrage and
‘stablecoin’ usage, to minimize the
volatility risks of retail OTC.
Long-term Strategies
Use of trusted verification tools and
variable thresholds of trust for different
value amounts can balance the polarized
desires for speed and security.
Use non-custodial escrow services to
provide 2 of 3 multi-signature mediation
to facilitate larger value transfers with
confidence.
Do not trust, verify!
Short-term Tools
• Crypto-integrated POS hardware
enables transparent, flexible, fast, and
secure payment clearance
• Software solutions can be implemented
for both low-value high-speed
transactions and high-value slow-speed
transactions
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13. Privacy practices as the standard method of operations in all communications helps financial data communications blend in with all other
messages. Helping to camouflage the specific transmissions containing value and minimizing the surface area exposed to attack.
Privacy is the foundation upon which financial liberty is built and defended. And secrecy is the 1st line of defense of data.
3rd Category of Concern; Communications
Mid-term Tactics
• Copy, paste, and delete all wallet addresses
avoiding misreading or mistyping ‘human’
errors.
• Segregate platform use according to the
sensitivity of the messages contained on
the platform.
• Document all numbers in writing, or with
audio/video recordings, or “it didn’t
happen”…
Long-term Strategies
When “Money is Speech”, encryption of
all communications regarding financial
details becomes the 1st line of defense of
one’s digital assets.
Discretion becomes the standard, and
over-sharing a ‘Sin”, with all data kept
strictly on a “Need to Know” basis.
Air-gap all financial and customer
documents that need to be kept for
prophylactic defenses.
Short-term Tools
• Multiple messaging Apps each with varying
degrees of encryption and security levels
for calls, videos, texts, and emails.
• Platforms for both Public and Private
groups and channels
• VPN browser extensions, router devices,
and 3rd party services to protect personally
identifiable information
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14. With both financial and personal legal risk exposure merely from operating in the crypto industry, exercising jurisdictional
freedom of choice requires awareness of and planning for strategic leveraging of the regulatory uncertainty now creating
jurisdictional competition. As well as prophylactic defensive documentation strategically implemented proactively.
4th Category of Concern; Compliance
Mid-term Tactics
• Operate both public and private entities, each
leaving a trail; digital, paper, & sometimes
none at all if kept F2F and P2P.
• The avoidance of lawsuits entirely is not
possible but, the losing of lawsuits when they
occur can be avoided IF the appropriate
prophylactic documentation in place
• Record all agreements on paper, in audio, or
on video, or else legally “didn’t happen”…
Long-term Strategies
Segregate pass-through accounts and holding
accounts across multiple state jurisdictions
allowing strategic selection of each type of
entity, its registered jurisdiction, & tax
exposure.
Outsource KYC/AML whenever possible to
trusted 3rd party providers to lower costs if
compliance is done ‘in-house’
Implement both virtual, digital, outsourced
and physical, paper, ‘in-house’
documentation protocols
Short-term Tools
• Use membership contracts and affidavit
templates to establish defensive paper
documentation.
• Outsource 3rd party provider accounts for
digital documentation, except for
documents containing sensitive financial
information.
• Navigate a only along a specific course of
action plotted for each entity in its ideal
taxation and regulatory jurisdiction.
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15. Lending of cryptocurrency collateralized with real goods can allow Spread Fee profit margins to be added to the interest
payments earnings, creating 2 margins to profit from, each with its own risk variables.
Payments on the interest made only in Fiat can eliminate the speculative risks of accepting Bitcoin back as payment on the
crypto loan.
5th Category of Concern; Credit
Mid-term Tactics
• Stack Spread fee profits into an
investment wallet for steady streams
feeding long-term holdings.
• Protect purchasing power enough to
cover fixed costs
• Reach clients that might not
otherwise be inclined to take out
loans or make sales of real goods
were it not for a desire for private
BTC acquisition.
Long-term Strategies
If one is a Net-Buyer, then keep the Spread Fee on
loans held as Btc to be added to long-term
holdings. And when they add up hedge the value
with a short-sell position.
Send the USD amount of the loan to be repaid as
Fiat into a stablecoin solution of some kind and
keep interest earnings held as BTC.
Allow other Net-Buyers in the local marketplace to
increase their own private BTC holdings by selling
outright for crypto or by putting unused assets to
use as collateral on a debt to be repaid in Fiat, and
incentivize an additional client base into the store.
Short-term Tools
• A trusted Stablecoin solution with reliable
liquidity and low fees is essential to ‘lock-
in’ purchasing power.
• Virtual Btc ATM locator service
referencing the collateralized lending of
Btc for real goods.
• A retail arbitrage account is needed to
cover Spot delivery delays
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16. Data defense begins with the discretion with the spoken word, is important to maintain air-gapped on paper or
metal sometimes, and if digitized must be recognized as written there for all time and under constant scrutiny for
openings in one’s operational security.
6th Category of Concern; Crypto-security
Mid-term Tactics
• Keep paper notebook on-site in a fire-proof
safe for all the backup phrases, master
password, private keys.
• Keep off-site metal wallets in tamper proof
seals with trusted 3rd parties as the 2nd copy
of those same keys, passwords, & phrases.
• Implement multi-factor ID w/pin, password,
and a physical key as the standard
operational procedure.
Long-term Strategies
Established private key management
protocols.
Strong password creation, protection, and
management systems used at all times,
avoiding any duplicates.
Put multi-factor authorization and multi-
signature wallet protocols in place for large
amounts.
Layer VPN service and use data encryption as
a disciplined security protocol.
Short-term Tools
• Create a checklist of account creation
operational procedures to be followed
diligently.
• Use a strong password manager along with
software and hardware multi-factor
Identification.
• Anonymously create and pay for 3rd party
providers of VPN services on browsers,
routers, and with remote server access.
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17. Proof of assets, source of funds, and identity documentation can be very simple for face-to-face physical transactions in a
controlled environment. Physical storefronts already have security measures in place (i.e. cameras, bars, security guards),
and staff trained to manage risk exposure of physical assets. Crypto wallet management will mirror these cash defenses.
7th Category of Concern; Countertop OpSec
Mid-term Tactics
• Establish due diligence protocols and
tracking systems
• Segregate assets, access to them, and
liquidity states
• Systematize processes for managing
downside risks and to keep volatility
from shrinking profit margins on loans
and spread fees.
Long-term Strategies
Again, “Don’t trust, verify!”…
Whether it’s the identity of you counterparty in a
transaction, the confirmations of the transaction on
the blockchain, or the provided proof of assets,
independently verify everything.
Diversify risk through compartmentalization of all
things; data, private key storage, backup passphrases,
account signatories, platforms and assets classes,
jurisdictions, and phase states of capital.
Hedge capital value enough to cover operating
expenses for labor and materials by using stablecoin
purchasing protocols and management of leveraged
accounts to control both short and long term risk.
Short-term Tools
• Documentation on both paper and digitally,
i.e. contracts, KYC, Purchase Orders, Fee
Agreements, Mandate Letters, etc.
• Multiple devices, Apps, and accounts; POS
devices, cold hardware wallets, physical MFA
& device 2FA.
• Multiple dedicated accounts on multiple
platforms with staff trained to on disciplined
use of protocol checklists, and encrypted
communication systems.
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18. Case Study
By allowing for collateralized crypto loans, crypto
purchasing of real goods, and the earning of additional
profits on retail OTC spread fees become available, IF
cryptobanking systems are implemented.
There are 7 categories of concern to a Cryptobanker that are already being modeled with
physical systems in place in every Pawn Shop;
1. Custody of the real goods and the cash held at the counter and in a safe in the back
office
2. Clearance risk policies in place, often ONLY accepting Cash for payment on loans
and for some even real goods.
3. Trusted Communications systems established to price the market value of items
collateralizing Fiat Cash loans.
4. Compliance protocols and documentation procedures in place to verify identity of
both Sellers and Borrowers.
5. Credit licensing in place as providing lending services is one of the main market
drivers for profits
6. Physical security systems with alarms and bars on the windows and doors with staff
armed and trained in defense applications, all mirroring tactics needed for Crypto
or Cyber security operations
7. OTC operational security protocols already established to verify proof of control of
the assets and authenticity of assets to be collateralized.
OTC Spread Fees for BTC can add new profit margins on loans and
purchases of real goods provided by consumers incentivized to
transact by the opportunity for private F2F digital asset acquisition.
Additional clients can be drawn into the store providing trade deal
flow increases and positioning for first mover and early adopter
advantages. Allowing for the growing of investing account values by
saving a percentage of the new profits as BTC, a scarce,
uncorrelated asset as a hedge against political currency risks.
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19. Case Study cont.
Integrated blockchain media strategies can provide not
only additional streams of deal flow but also incentivized
systems that pay for feeding the platforms with content.
 STEEM Powered Media Motor- each morning marketing content is to be
cross posted between multiple accounts on multiple platforms:
1. An Admin Steem Acct. posts “daily sales” feed on Busy, Steem-it,
and a video of the items on D.Tube, each under its own
dedicated Steem account. Then Tweets the link and shares it to
the public Telegram channel, also posting the video on Youtube
and Bit.Tube with photos linking to the D.Tube channel posted on
Instagram.
2. A Steem Manager Acct. posts an “Act Now” notice for the daily
discounts on Steem-it, Busy, and a video on D.Tube, each also
under its own dedicated Steem account. Then Tweets the link
and shares it to the public Telegram channel, also posting clips
with backlinks for the full video on Youtube and Bit.Tube with
photos linking to the D.Tube channel posted on Instagram.
3. Each separate account up-votes the posts of every other account
whenever they are Tweeted about.
 Each evening before closing a fresh posting on each account is made
sharing the “Over-night Specials” and “early-bird rewards”. Duplicating the
morning’s processes with items placed on a time sensitive discount that
expires 2 hours after store opening.
Not only are calls to action with expiry deadlines regularly issued,
but the efforts of producing the content are compensated for not
only with Steem Dollars, but also Tubes and USD.
With all content kept under the content creator’s control stored on
a permissionless and uncensorable blockchain.
For more info click here.
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20. Case Study cont.
Precious metal hedging and “stacking” of reserve capital
that is kept both private and public, liquid and frozen.
 Having a Bullion Backed Private Banking system in
place can allow one to “lend your capital P2P
(even to oneself) and keep your metals too”.
1. Store $20K of capital as precious metals kept in an
insured, audited, and well secured private off-
shore vault facility that accepts BTC payments for
bullion
2. Deposit another $10k as USD in the trusted local
bank that has a relationship established with the
storage facility.
3. Place and match a loan offer with one’s own
private Bullion account providing the collateral
backing the loan with a total administrative cost of
1%.
4. That loaned USD then provides the lending capital,
funding as needed the short-term collateralized
loans made in-store at much higher interest rates
of 20% and above.
This tactic allows for long-term holdings to be kept in low volatility
precious metals, with storage fees and admin fees covered by the
interest rates charged on the P2P loans made over-the-counter.
Capital held is hedged against the political currency risks of Fiat and
the volatility risks of cryptocurrencies, while remaining liquid and
available for movement back into either Fiat or crypto.
More details on this tactic found here.
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21. A Curated Case Study crafted by
The Taoist Cryptobanker
Michael Louis Jr: Ovsen
Cryptobanking Strategist, Author, and Coach
Empowering entrepreneurs to exercise monetary freedom of choice and take control of the wealth they
produce without permission, recognition of arbitrary borders, or risk of censorship.
Strategically aligning, armoring up, and weaponizing a fleet of international merchant Crypto Captains
with balanced public and private cryptobanking and cryptotrading operational protocols.
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22. Summary
There is an unmet market demand for private retail F2F
purchasing of cryptocurrencies. And Pawn Shops are perfectly
positioned to become the 1st movers into the retail crypto
realm that are meeting those consumer demands.
 Retail OTC spread fees can incentivize the training of staff to manage
transaction, custody, and volatility risks.
 Incentivizing consumers to liquidate their under utilized real goods in
order to privately acquire cryptocurrencies will motivate transactions
that otherwise wouldn’t occur.
 Adding not only additional income streams to the business profit
margins, but also a new uncorrelated asset class to further diversify
risks and manage unknowns in current asset classes, i.e. precious
metals, fiat currencies, real estate, and stocks/bonds
 All while minimizing profit shrinkage due to rent seeking 3rd parties
and acquiring control of the clearance timing without the delays and
‘business hour’ limitations of current transaction clearance systems.
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23. Thank you!
Michael Louis Jr: Ovsen
Email:
thetaoistcryptobanker@pm.me
WhatsApp:
+ 1 512-693-7076
Telegram:
@theTaoistCryptobanker