Harry Scherzer — Future Forex, crypto asset arbitrage

and it is once more what's involved. So good to have you along with us. I've got a special guest tonight. He says, as he gently chokes to death, and it's partly because of excitement. And I've been looking forward to chatting to these guys because they do something that I need to understand a bit more and I think you're going to love this. Who am I talking about? None other than Harry Shosa, he is the CEO of Future Forex. Hello Harry, how are you doing? Hi David, thanks for the really complimentary introduction. I hope I can look up to your viewers' expectations. I'm absolutely certain that you can. So what I like to do before we sort of dive into the meat and potatoes of what you guys do, tell me a little bit about Harry, give me a bit of your background. Yeah sure David. So initially I studied actuarial science at UCT and went on to become a qualified actuary through Ernst & Young. I was there for three years, finished all my board exams and became an actuary and promptly realized that as exciting as the actuarial field was, my real calling has always been an entrepreneurship. And so I went into a more entrepreneurial role and started my own company at the same time. And that company is what's now known as Future Forex and has grown quite rapidly since it started. And I'll get into a little bit later what exactly we do but it's been quite an incredible journey and I can finally tell you that this is my calling, to start an investment company with niche exciting investments which I'm hoping will continue to outperform or significantly outperform traditional investments in the market. Okay well now everybody's ears are picked up because we'd like to know a lot more about this. I certainly would. Now as soon as you sort of, for me personally, when I got the mail and I saw Future Forex I thought oh no because I burnt my fingers with Forex trading before quite badly actually because when you use those fancy programs that they tell you to use when you're in the trial mode everything works brilliantly and then you go in and you try it for yourself and I'm amazed at how quickly I could lose money even faster than at a casino. You guys are not necessarily like that are you?

No David, we're not a Forex course as much as our name suggests so. We actually do something very very niche and very specialized. So what we effectively have done is we've just capitalized on a market inefficiency that we found in the digital asset space. So to give you a bit of context on what we do, we buy digital assets like Bitcoin or other cryptocurrencies abroad and immediately send them to South Africa and sell them in South Africa out of profits and the reason we're able to do so is because the price of digital assets like Bitcoin typically

trade at a two to four percent premium in South Africa compared to the prices abroad. So what this means is that we can send clients money from RANS to dollars, purchase cryptocurrency, send the cryptocurrency to South Africa and sell it in South Africa at a profit in a relatively low risk way. So initially when we started doing this it was there were definitely risks involved right when you when you send the money abroad there were Forex fluctuations as much as the as the price of the digital asset may have been more expensive in South Africa than abroad that profit could have been wiped out by a fluctuation in the RAN dollar or a fluctuation in the digital asset while you're holding it because we know how volatile something like Bitcoin can be even if you're holding it for just a few minutes if someone tweets something which wasn't expected the price can plummet. So when we initially did this that was our biggest concern and I'll go through it in more detail a bit later but in a nutshell we've now managed to hedge all the market risks in the process to ensure that clients can predictably we can predict clients returns at the onset of a trade because all trades are executed immediately and reverse trades are locked in as we execute the trade from as we initiate the trade from South Africa.

Okay that's fascinating as you're talking about that I'm looking at my very teeny tiny little portfolio and sort of last year I was sitting at about three thousand and three thousand three hundred odd dollars and it's now tanked to a thousand and nine dollars and watching the graphs everything that was supposed to be a really really really good investment at the time because that's I think the problem is if you're doing Bitcoin particularly you've got to be able to watch it all the time and you've got to be able to make these informed decisions and I didn't I mean I've got things like Ethereum I've got Chainlink I've got XRP and for a while they were doing brilliantly but they're not so now how would you guys tackle something like this and you know like I said you I think I definitely believe that Bitcoin and blockchain are the future but you know it becomes quite scary do you make it easier for us? David there's a big distinction to be made here in that we actually don't invest in cryptocurrencies like Bitcoin like XRP like Ethereum we don't invest in those currencies what we rather do is we simply buy on a cheaper exchange and sell immediately on a more expensive exchange so we buy abroad and sell locally simultaneously to ensure that we can capitalize on that price differential so in truth David when cryptocurrency goes down in price and guys are making losses elsewhere it doesn't affect us we just look what is the price differential as long as that is still healthy as it has been over the past seven eight years we can continue making money over and over again and we're not exposed to these differentials so this is really a safe way of getting of gaining of making gains in the crypto market without actually being exposed to the associated risk with cryptocurrencies and that heavy that high level of volatility. Well that's fantastic that now makes a whole lot more sense so take me through the process I mean so I come to you and I say Harry I have X amount of money I would like to invest with future forex is that what I do and how does it work from there?

Yeah that's exactly it so we try to make this as passive as possible for clients because we understand people don't have the time or energy to to track graphs and track price differentials and manually calculate what's the price in America what's the price in South Africa what's the rand dollar so that's all done by our proprietary trading software and all clients need to do is they need to head to our website hit the register button fill in a basic document and from there our team takes over and makes sure that it's as easy and simple as possible so we assist with setting up local bank accounts which allow us to trade we assist with all the trading and on top of that because of the hedging of market risks we are able to only trade if a desired return is met so let's say David that you're not willing to trade unless you can make 1.5 percent each time you trade a trade takes a couple of days so each time you trade you want to make 1.5 percent net profit on your money what our systems will do is we will wait for the price differential to hit a point such that your net return after all costs is 1.5 percent and we'll trade for you at that moment and if it doesn't hit that price we simply won't trade for you so it's quite an amazing investment whereby clients can set what they would like to earn each time they trade now remember you can do multiple trades per year over and over again to the point where our average annualized return exceeds 70 per year for our clients because 1.5 percent per trade doesn't sound like a lot but you do that call it 50 times in a year suddenly you're at that 75 per annum mark some of our clients last year made over 100 on the initial investments and it just shows how these small returns because of the cyclical nature and the ability to do multiple trades it can really add up and each trade is extremely safe it's extremely low risk in the sense that all market risks are hedged for right at the onset okay this is this is sounding better and better so when we come back Harry if you don't mind uh let's dive a little bit deeper into to what you guys do and how the process works because you know and and obviously i need to discuss things like is there a minimum amount that you can invest in those how does but we'll get into all of that okay when we come back

cool uh this is what's involved my special guest uh harry shows her he is the ceo of future forex and it sounds like an answer to at least my prayers and i'm sure um to yours as well so we'll find out more from harry when we come back this is what's involved so good to have you with us and we're back with what's involved my special guest harry shows a ceo of future forex right so before the break you were telling me about this and as soon as you said 75 percent i nearly fell off my chair because um i've got i've got a friend who actually does trade currencies um and you know a 1.5 percent return um is something that is is what they look for they're quite happy and as you rightly say it doesn't sound a lot but if you do 50 to 100 trades that's that's making money because do i understand correctly harry that let's say i give you ten thousand rand and then we we invested or whatever and then i get my 1.5 percent on that so the next trade will be my 10 000 rand plus the 1.5 percent which i then get an additional 1.5 percent on top of that every time i trade david that's correct um except for the one caveat that our minimum investment amount is 100 000 rand so if we had used 100 000 rand as the example that's exactly right if you had made 1.5 percent of your first trade the next time you trade you'd be trading with 101 500 um and that would obviously compound profits which is um which is fantastic for for our clients but i do want to quickly run through why we have a relatively high minimum investment amount and david the reason is that there are fixed costs involved in this process by third parties as an example we use mercantile bank to to do our trades mercantile or the business division of capitec bank and they charge a fixed cost of 500 rand for sending money out the country now if we were to allow someone to invest 10 000 rand you can see that five percent of that 10 000 rand is going to the 500 rand to send the money offshore and that would remove all profits and ensure that no profits can be made at any point so therefore we had to pick a minimum amount um whereby we can ensure strong profits uh if a client invests that much or more obviously the more you invest the lower that 500 rand becomes as a percentage so the more you're likely to make but for that reason our minimum investment is 100 000 rand because that equates to a 0.5 fee to send the money out the country which is not enough to to um to remove our profits by any stretch you know when these digital assets sit between two and four percent above their prices abroad so there's a differential of two to four percent um 0.5 percent while it's while it is um a decent chunk it's not enough to remove the profits um gained okay that makes sense and you know what one of the problems that that i have been uh an old fogey like i am is that uh numbers you know i'm one of those back in the good old days you could buy a packet of chips for two cents or something a hundred thousand rand these days realistically is not a lot of money um you know and and it's something that you know if i'm if i'm getting a 75 percent growth um you know or more or less even 50 percent i would be quite happy with uh putting my money with you now obviously there are certain certain things so help me out if i come to you because you know when you said crypto i understand that but does that include nfts and strange things like that no we don't we don't deal in nfts or any other strange things we our our aim here is not to invest in cryptos or not to have any exposure to cryptocurrencies you know david this could these could have been avocados had avocados been more expensive abroad than in south africa and the cost of shipping the avocados to south africa um if that was less than the price differential then it would be quite easy to buy avocados abroad send the avocados to south africa and sell them in south africa to profit that's exactly what we do but we just use cryptocurrencies because they happen to be an inefficient market where their price differences in south africa compared to abroad so this has nothing to do with nfts or any of that funny stuff in fact it doesn't have much to do with cryptocurrency either we simply use cryptocurrency as the vehicle to make profits because of a price differential okay so let's assume then um i've given you my my hundred thousand i've gone to the website um we'll get into all of those details and i've said to you harry here's my hundred k make it rain what is the process from there on in so the process from there is you will be we will assist you in opening a local bank account um and you would have to transfer the money to that account so importantly that account is in your name so it could be david watson's bank account in south africa it's not future forex's bank account nothing like that it sits in your account um with mercantile bank from there when the conditions um justify it we will trade um to ensure that you hit that return that you had desired or above that from there the money will be sent offshore cryptocurrency will be purchased we'll have already locked in a race to sell the cryptocurrency abroad so that there's no exposure to you and the money will be returned to south sent to south africa sold in south africa and the rands will be returned to your account so let's say it was 1.5 percent you would now have 101 500 in your account uh this is probably a good time to mention that we don't actually take any management fees for the service instead of that we share in a percentage of profit so maybe you actually made 102 500 when it came back but we took our share and you were left with let's say 101 500 so we find this fully aligns with with our clients not taking a management fee we can only make money if our clients do and the more money our clients make the more money we make and this is one of our key principles is alignment with clients along with transparency with clients um so that's that's the process it's as simple as that once your once your funds have arrived it's as simple as it gets sent out sent back then we wait again for conditions to be favorable and do the same thing again and it keeps it's a cyclical um the cyclical nature of it allows us to do multiple trades for you um each year and and before you know it you could have large sums of money in that account just because you've done so many trades so david at this point the question is this seems too good to be true where where's the catch you know where where's the restriction yeah surely there's a restriction so i think in line with our key principle of transparency i would like to be completely transparent here in that there is somewhat a catch and that catch is that each south african can only exercise this up to a cumulative 11 million rand per year these are because of our foreign exchange allowances in south africa so in other words the most you can do if you gave me a hundred thousand rand david you'd only be able to do a total of 110 cycles for the year and that would cap out your foreign investment allowance for the 2022 year until 2023 and the reason it's 110 cycles just to run through the maths there is it's 100 000 rand times 110 is that full 11 million that you can take offshore each year so of that there is a maximum that you can earn in the year which which tends to set between call it 150 000 and 250 000 rand depending on conditions that's as much as you're going to earn over the year um of this which is nothing to sneeze at of course you know the idea of making that as extra alp in your portfolio uh is really something to consider but this is the reason that you don't have rand billionaires going and doing this with billions of rands every day and making 1.5 percent of a billion rand every day and just getting um abnormally rich and that's also the reason that the arbitrage gap exists um in the first place you know if there were no restrictions you would get these these moguls coming in and and spending tons of money just repeatedly cycling their money to a point where it would extinguish the gap but because each south african individual can only exercise up to 11 million rand per annum there isn't enough supply to diminish this um this arbitrage gap and that's the reason that the arbitrage gap has existed for so long and will continue to exist unless south africa put an end to exchange control regulations which are very highly doubt they would i know that was a mouthful david so i'm happy to go over anything there which maybe i breathe through too quickly yes i think we need to just get a character on a couple of points uh let's do that when we come back my special guest on what's involved harry schoza who is the ceo of future forex we'll find out more when we come back this is what's involved and we're back with uh harry schoza my special guest on what's involved he is the ceo of future forex and you know my immediate sort of response there would be what what sort of witchcraft is this but you've explained it in a way that makes sense to me and i think that is very important because a lot of people are going yeah you know why why would i just give my money away to somebody um and and hope that they're going to make money but essentially the money is in my account and it's it's my money uh you know so it will come and go but only after we decide what sort of profit i want to make is that that i've got that bit right yeah that's exactly correct david okay then in terms of of how this moves backwards and forwards uh during the year let's say um i now turn my hundred thousand into a hundred and fifty thousand where does text come in what are the text implications on this are they implications yes there are implications david so the reason that the government is so happy to allow this arbitrage to continue and individuals to continually perform this arbitrage and the reason that it's all above board is because individuals who make money off arbitrage are expected to pay tax on it um at the rate of income tax so it's seen as additional income it's not seen as an as a capital gains tax it's seen as additional income so for those in the highest tax bracket almost half of the money goes to the government as it's seen as additional income but the truth is that if you're paying more tax it means you're netting more money than you would have otherwise so although it is frustrating that a lot of a big chunk of money may go to the government um the remainder is money that you wouldn't have otherwise had okay and and that obviously with with something like that when it comes time to do my tax return um i would then go to my account and say here you go this is what it is this is what has happened you sort it out and they work out all the nets and bolts that's exactly right david and for those that don't have an accountant we do send through a detailed trading statement at the end of each trade as well as at the start of each or the end of each tax year um just showing all the trades that you did the total amount you made and that can be simply be submitted um to SARS if more information is required otherwise you can just put in the amount you made in into e-filing and everything will be sorted fantastic now this money that i've now invested which is growing do i have access to that or is there is there some some sort of clause where i have to leave it in or if i decide listen sure no um you know i need to i need to um buy this month's groceries so i need to take my hundred thousand rand out he says with his tongue firmly in his cheek um am i able to do that david it's very important to us to have as much liquidity as we can for clients so absolutely if you're not midway through a trade you can take your money out immediately it's your bank account you can simply withdraw the money to one of your other bank accounts or into cash whatever you want to do um however if we're in the middle of a trade each trade can take up to two days so let's say we've just initiated the trade then there may be a two-day wait for the money to return with the profits and then those can be taken out so at most you'd have to wait a couple potentially a few days before accessing your money but that's only if you're midway through a trade otherwise it will be immediate okay and then there's no chance i mean maybe there is a chance because it's volatile but the way that you've explained it so far um there's a very slim chance that you're going to come back to me and say listen uh the crypto market imploded and you now have no money david there's there's a zero chance of that purely because we hedge all of the market risks so whatever happens to the crypto market we are completely unaffected by at the at initiating of a trade we're we're executing reverse positions to ensure that everything is completely hedged from the onset this is something that was very important to me when developing this business being an actuary managing risks is a key factor that i needed to do for clients i didn't want any form of risk so we've developed a fully hedged solution which allows us to have no exposure to either the forex fluctuations or to the cryptocurrency fluctuations such that we can predict the returns up front so any implosion of cryptocurrency will not affect your your trades at all and will not affect the profits you make okay so just just talking about risks and and you mentioned that it is fairly sort of risk-free harry um two questions that i would like to to just check with you number one because i know this is going through people's minds at the moment is are you a registered and all of those things fsp and number two are there any other sort of risks because you know sometimes if something is sounds too good to be true it is so there must be some other minor risks talk to me about the fsp and the minor risks yeah david i'll start with the fsp situation we are an authorized uh fsp for currency remittance services so that really was a feather in our cap that the fsca was happy to um register us with that and it creates a lot of credibility i understand that this um is a very specialist and niche investment investment product and therefore having an fsp license has really helped with our credibility which is really um excellent for us and we're we always do everything above board you know being an actuary uh i ensure that everything's done above board so pushed for us to become an fsp i'm also pushing for the government to further regulate uh cryptocurrencies in general to ensure that the wild west players move out of the market and the only ones who remain are those that are actually um that actually have a reason to be in the market and can make genuine returns and without the absurd risks that some of these players tend to tend to go and scams in general tend to come into the market with so yes we are an authorized fsp on that front and the second point is regarding the risks so david you mentioned this is relatively risk-free i wouldn't say it's relatively risk-free i'd say it's extremely low risk nothing in life is risk-free if you put your money in a bank account even that isn't risk-free because however unlikely it is it is possible that the bank goes under and you can't get your money it's just extremely low risk right so by the same logic there's no market risks with our product so no fluctuations you're not exposed to any fluctuations but there is still a third party counterparty risk so in other words if one of our providers fail um we may not be able to to cover that so an example of that is if mercantile bank that we used to do the forex transactions if mercantile bank fails for whatever reason uh that could cause an issue but we trust we use all the top counterparties to ensure that this risk is completely minimized as far as possible um so all the all the counterparties that we use are well trusted banks and institutions with the lowest element of risk um what we do on top of this because we find that our reputation is far more important than any amount of money what we've done is that the senior management have taken very small salaries if any salaries up to this point in order to accumulate profits within the business so i run this business a little bit like an insurance company coming from a natural background whereby i keep profits in the business so if anything ever does go wrong anything unforeseen ever does go wrong it hasn't yet luckily but if anything ever did we would have at least some reserves to be able to cover that that doesn't mean we have enough reserves for if an entire third party fails we probably wouldn't have enough reserves but we'll use everything we have to cover the clients as far as we can so in terms of risks the risks are minimal they really are we use very trusted third parties but nothing in life is risk-free there's no such thing as a free lunch so fully transparently much like any other investment the risk of a third party failing is the only risk involved here okay and that that that makes a lot of sense and thank you for sharing that with us because you know yeah if you want to make money in any way shape or form whether it is by opening a business investing whatever the case may be there is always that lower risk of something happening and it could happen you know with blue chip shares as well i mean we just have to look at at covid and what that did to markets and yet um if i understand you correctly you guys did okay during covid absolutely covid was when our business really started flourishing i think people took their money out of the markets and came to us because ironically we're we're a safer option in the market we don't have those price fluctuations once people understand what we do and how we make money and can verify for themselves that there is a price differential in cryptocurrencies between in south africa and abroad it becomes a relatively easy decision to go for a safe and reliable investment which can make returns as we said north of 100 per cent per annum and with average annualized returns exceeding 70 per cent per annum for clients to date wonderful stuff my special guest is harry sherzer he is the CEO of future forex wrapping it up with harry when we come back this is what's involved it's so good to have you along with us and we're back with my special guest harry sherzer CEO of future forex okay so harry in just to wrap it up now let's just reiterate so what you guys do is um you sort of essentially buy and sell cryptocurrency working on that differential and um the money then would go into and out of our accounts you're an fsp which is great credibility uh it's fairly low risk we discussed that earlier on what else do we need to know like let's say that you know uh my listeners is sitting here going okay you know what this is good this is something that i need to invest in i need to make part of my portfolio of investments what is our next steps so the next step from here david once you understand the process and it is important to me that my clients understand our process if you understand our process and you've heard enough to invest you can head to our website which is futureforex.co.za and you can hit the register page in the top right however if you'd like to speak to someone because you have other questions that maybe i didn't address or you'd like to understand something more deeply you're welcome to either email us at info@futureforex.co.za or head to our website where you can put in a query form and one of our representatives will be in touch with you directly fantastic just a quick one before i let you go um in terms of a client base are we allowed to ask you how many clients you have yeah sure david i'm i'm fully transparent with this uh with this business with this company there's no point of holding any cards close to my chest anything anyone wants to ask i'm more than happy to answer so we're bordering on a thousand clients at the moment but bear in mind that these are high net wealth clients each with at least a hundred thousand rand invested in us often more and so to date we've cycled just shy of two billion rand for clients generating exceptional returns for all of them so it really is growing but in my view once the penny drops for for sub-africans this will just be the start you know a thousand clients is very small relative to what this could become because of how lucrative and low risk this opportunity is okay so here's here's another question and i'm and i'm asking this not necessarily playing devil's advocate because i want to get it clear in in in my mind so if we have um and let me use my mom as an example she's a a little old lady who's you know just about to turn 80 and she's got some cash is this a good place for her to put the cash not all of it but some of it david i've had the exact same question myself because when getting when starting this company it was difficult to get the random person walking on the street to to believe in this product the first thing i had to do was go to my direct friends my family my grand my my great aunt you know all the people who have um who who love of what they have and effectively i'm not the type of person who would be able to encourage someone investing in something unless i fully believed in it and believed that it was safe enough that there was a very low probability virtually zero probability that things could go wrong so for that reason david i think anyone um who who uh would like who understands our process and would like to invest in it should do so what i don't encourage is for people to invest in us without understanding the process and the reason i say that is that that's how people get caught out with scams they don't understand what people do they hear these great returns and they invest and i don't want to encourage that even in my own product because while we're not a scam and we make genuine returns it's important for me that my investors understand exactly what we do and how we do it and for that reason we've held multiple talks done multiple webinars just educating on the crypto arbitrage market so for anyone who understands this but wants to understand it better i strongly encourage you to head to our website have a look at our featured media section um and and gain a bit more knowledge otherwise you're welcome to reach out to our sales team directly who will give you a far better insight into what exactly we do individually with your personalized questions which they'll be able to answer so david what i'd say is i wouldn't put your i wouldn't be comfortable accepting your mother's money unless your mother understood the process and what we're doing and how we make money once it makes sense to her then i'd be more than happy to take her money and ensure that we get these exceptional returns we have been getting over the over the past couple of years wonderful stuff you know that that makes me feel a lot better and just the fact that we can get hold of you guys and ask you questions so the website is future forex one word.co.za and if you'd like to ask any questions just drop a mail to info@futureforex.co.za and who knows you could be joining the future forex team and getting some great returns on your investment harry thank you so much for taking the time out and having a chat to us it sounds like you you've come up with a formula that really does work and we do wish you all the very very best david thank you so much it's been wonderful chatting to you and i hope it's not the last time that that we get a chat because it's really been a pleasure talking to you and your listeners and i'm sure we'll see you again soon wonderful stuff there we go that wraps it up for this edition of what's involved my special guest there harry schurzer ceo of future forex as i mentioned go check it out futureforex.co.za if you've got the cash maybe have a look at investing wraps it up as i said to each and every one of you look after yourselves take care and thank you for listening