Boerse Stuttgart’s trading app grows in popularity after FTX’s insolvency. Digital manager Ulli Spankowski explains why.
Boerse Stuttgart has won new customers for its crypto trading app Bison despite the drama surrounding crypto exchange FTX. “We have the highest growth figures since April because the offer from Bison and Boerse Stuttgart Digital Exchange is meeting confidence. The problems at FTX have actually brought us growth,” Ulli Spankowski, the digital head of Boerse Stuttgart Group, told our newspaper. He did not give specifics numbers, but according to the stock exchange, there have been twice as many new customers since the problems with FTX became known in late spring.
Crypto exchange FTX, which filed for bankruptcy on November 11, is registered in the Bahamas. After their bankruptcy, it became known that customer funds had disappeared – whether this is due to a hacker attack, embezzlement by the operator or both is not yet entirely clear. Similar cases have occurred since the invention of the oldest cryptocurrency, Bitcoin, starting with the bankruptcy of the first crypto exchange Mount Gox in 2014.
The events at FTX, whose inner circle around 30-year-old founder Sam Bankman-Fried are said to have run the business from a shared luxury apartment in the Bahamas, shine a spotlight on the Wild West mentality in parts of the industry. .
Crypto service providers are regulated in the EU
“The idea of crypto and blockchain is good, but market participants like FTX are ruining it,” Spankowski said angrily. You don’t have to share his positive basic assessment: cryptocurrencies are a high-risk form of investment simply because of the violent price fluctuations. The Bitcoin network, especially the blockchain, is also highly controversial due to its high energy consumption. The European Commission recently announced that by 2025, it will examine various options on how “the negative impact of crypto market technologies on the climate can be mitigated”.
On the other hand, there are already more energy efficient developments in blockchain. Several companies are already testing this for fully automated invoicing processes, such as payment for goods immediately after delivery. Because of this innovation potential, the EU does not rely on trade bans – like those issued in China – but on regulation of the crypto market.
Boerse Stuttgart reveals holdings for Bafin
Even today, companies in the EU that store Bitcoins and other crypto-assets for their clients – such as the Stuttgart Stock Exchange – require a permit from the Financial Supervisory Authority, in Germany this is Bafin.
You report to Boerse Stuttgart “at regular intervals throughout the year our stocks of crypto assets held in custody,” explains Spankowski. “If customer funds were moved to a sister company, as happened with FTX, it would be noticed early.” In addition, internal crypto custodian Blocknox would check the cryptocurrencies held in trust as part of the annual audit.
combat money laundering
Crypto platforms in the EU are also required to take certain anti-money laundering precautions. This excludes, for example, transactions with customers from countries that have serious deficits in combating money laundering or terrorist financing. In its latest circular on the subject, Bafin also refers to the financial sanctions imposed on several companies and individuals in Russia. Unlike transfers via the Bitcoin blockchain, where the personal identity of sender and recipient is usually unknown, Bison users and customers of other crypto service providers in the EU must identify themselves upon registration.
In addition, Boerse Stuttgart also checks the origin of the coins traded via Bison. The path of each virtual coin can be traced thanks to the transaction history stored on the blockchain. In this respect, it is easier to prevent money laundering here than with cash, emphasizes Spankowski: “If you get change for your roll at the train station in Frankfurt, no one knows through which hands it passed beforehand in the station district.” Identify suspected cases of money laundering using certain transaction patterns.
Investigators report successes
In fact, law enforcement is moving forward. In February, a pair of hackers were arrested in New York, said to have stolen nearly 120,000 virtual coins from the Bitfinex crypto exchange in 2016. Their total value in February was around five billion dollars. A spectacular investigative success – on the other hand, this type of crime would not have been possible in pre-encryption times.