What is the one major thing that has been troubling investors about cryptocurrencies? The fact that it’s not regulated is the resounding answer. Because cryptocurrency exchanges store and trade assets, there is the potential that they will be vulnerable against cyberattacks. As highlighted by TechCrunch earlier this year, the U.S. Securities and Exchange Commission (SEC) claimed that “cryptocurrency exchanges are an unregulated mess”. The SEC issued a further warning to emphasise the potential risk that investors face by putting their trust in the exchanges that manage their money.
With the promise that an imminent crackdown on cryptocurrency activity was in the pipeline – news of this big change has made today’s headlines.
Crypto Regulations on Swiss Time
SEBA Crypto AG could be the first specialist start-up to improve cryptocurrency regulations as we speak. To date, the trailblazers of the enterprise (two former bankers from UBS Wealth Management) have raised approximately £80 million in capital to launch the fully-regulated crypto investment bank in Switzerland. Who are the revolutionary co-founders of SEBA? Chief Executive Guido Buehler made the transition from being the Head of Asset Servicing at UBS, alongside Chairman Andreas Amschwand, who was once the Global Head of Foreign Exchange and Money Markets at UBS.
With competition from other eager start-ups wishing to take the premier mantle in the region, SEBA has mapped out their plan, by initially applying to Swiss financial regulator, the Financial Market Supervisory Authority (FINMA), for a traditional banking and securities dealer licence. SEBA hopes this will come into effect by the end of Q2 in 2019.
As it stands, SEBA will have to wait until their licencing process has been processed by FINMA before they can offer any online or physical cryptocurrency-related banking services. Nevertheless, the start-up has secured its substantial funding from a range of financial institutions and private investors, such as BlackRiver Asset Management AG and Summer Capital. Together with FINMA’s approval, these are big positive steps for the Swiss company to corner the market with success. When they are given the go-ahead, SEBA will provide traditional banking and asset management services, including cryptocurrency trading and custody services.
In IBS Intelligence, SEBA’s investors shared their glowing testimonials:
“SEBA is an extremely promising start-up with an ambitious mission. The investment in SEBA is predicated on deep analysis of the velocity of the cryptographic asset market – if adoption, use and utility continue to gain traction at the same rate; crypto will become a legitimate, sound asset class and therefore hold a requisite allocation in investors’ portfolios.” – Guy Schwarzenbach, CEO at BlackRiver Asset Management AG
“We see our investment in SEBA as leveraging the known ties between Switzerland and Asia, marrying the deep heritage in financial services and security standards of Switzerland, with the impressive growth and innovation that is powering Asia.” – Jack Chung, Managing Director at Summer Capital (Asia)
So, who else is vying to be the first start-up in line? The US is looking like a top contender to steal Switzerland’s glory, as Circle (which is being funded by Goldman Sachs) is also registering for a licence to carry out crypto brokerage and trading across the whole of North America.
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