Swiss cryptobanks play regulation and trust arguments in crypto winter and continue to expand

The crypto bank Sygnum is now active in two locations: Abu Dhabi and Luxembourg. Seba Bank opens an office in Hong Kong.

The Swiss crypto banks Sygnum and Seba also believe that the current market environment in the crypto sector offers challenges – but apparently solvable ones. The two FinTechs with banking licenses are increasingly playing Swiss trump cards and, above all, their position as FINMA-regulated banks. For obvious reasons.

The new Sygnum office in Abu Dhabi

The seriousness and trust created seems to bear fruit even in difficult times. Sygnum has now expanded its global customer base to almost 1,500 customers and expanded the team to over 200 employees.

With the new location in Abu Dhabi, Sygnum wants to gain access to one of the largest global wealth and asset management pools. The bank thus operates in the fast-growing crypto hub of the United Arab Emirates (UAE). According to FinTech, Sygnum benefits from the world’s fifth highest crypto acceptance and a marketplace with annual transactions of more than 25 billion US dollars.

Sygnum has received approval in principle from the Abu Dhabi Global Market (ADGM) Financial Services Regulatory Authority (FSRA). The company’s new Middle East hub will be led by the appointed UAE Senior Executive Officers Giulia Finkbeiner Bertoniwho is convinced of the potential of the region:

I am delighted to join the global Sygnum team and share our vision for future finance with Abu Dhabi’s financial community

Sygnum will serve the local market with a crypto-native suite of digital asset banking, wealth management, tokenization and B2B banking services. Target customers include blockchain companies moving to the UAE due to its well-regulated crypto environment, existing local crypto funds and projects, as well as “traditional” institutional investors and HNWIs looking for reliable exposure to crypto assets through a regulated search for partners.

Sygnum also regulated crypto services in Luxembourg

As part of its international expansion strategy, Sygnum has also decided to establish itself in Luxembourg for a number of reasons. The country has a clear regulatory framework, cryptocurrency adoption is growing, and there is strong local demand for reliable, institutional crypto services. With assets under management of CHF 6 trillion and a market share of 27 percent, Luxembourg is also the largest fund location in Europe (source: Alfi).

Sygnum’s B2B banking services enable banks and local custodian banks to offer regulated crypto services to their end customers to continuously expand and future-proof their offerings. The solution provides fast, modular access to Sygnum’s full range of banking services through a single access point. These include segregated client wallets, institutional grade crypto trading, custody, staking and tokenization.

Sygnum’s Institutional Crypto Custody is aimed at alternative investment funds (AIFs) and institutional investors, offering secure access to the growing universe of crypto assets. As a regulated Swiss bank, Sygnum fully segregates client assets, eliminating counterparty risk and creating a trusted environment.

Seba’s new office in Hong Kong

The second Swiss crypto bank with a banking license also apparently sees no reason to put the brakes on expansion in the crypto winter. Almost at the same time as Sygnum, Seba is also expanding geographically and breaking new ground.

FinTech opens a new office in Hong Kong to strengthen its presence in the APAC market. The bank establishes a subsidiary, Seba (Hong Kong) Limited, to serve the Western Pacific regions from Hong Kong.

According to Seba, this move is a response to the growing demand for crypto services in the region. According to the bank, Hong Kong has a supportive crypto licensing framework, which provides a valuable base for tapping into the business potential of the region. Seba Hong Kong’s initial activities will focus on consulting services and market research, as well as attracting strategic partners to the Swiss headquarters.

From Switzerland, Seba offers a range of regulated banking and investment services, including trading, structured products, bank accounts, cards, lending, staking and crypto and NFT custody. Seba also attaches great importance to the fact that customers’ assets are kept securely in separate accounts off the balance sheet, and that customers are therefore guaranteed direct access to their assets at all times.

Regulation and trust are coming to the fore in the crypto market

The notes on regulation and custody, which both Swiss cryptobanks are increasingly emphasizing, are necessary and important. Information and facts that have become even more relevant since the FTX debacle.

It is amazing that it took the earthquakes surrounding Terra-Luna, Celsius and FTX to bring the aspects of seriousness, regulation and custody of crypto assets to the fore.

Regulators are in demand for these questions, but above all the crypto industry itself and investors. The latter because their assets are only safe if the investors remain in control of their own assets. You can access your own wallets outside of the chosen crypto exchange at any time – but not flush crypto exchanges whose withdrawals are blocked.

Additionally, and this applies to any kind of crypto commitment: verbal tranquilizers administered by the respective providers are not enough. Each platform will claim that clients’ assets are safe. Every crypto company should have checked and verified numbers on the table whether and in what form crypto assets are secured, secured or, in the case of stablecoins, deposited with corresponding values. Only then can investors assess whether their deposit is backed 1:1 with, for example, US dollars – or whether the provider is gambling with the supposed security.

Many years ago we wondered and pointed out several times why a large community of investors carelessly use stable flagship coins without having the slightest idea whether the promised security is actually deposited 1:1.

The said flagship and other providers are currently toppling their efforts to catch up on omissions and replacing mere claims with concrete numbers. Here too, however, the following applies: published figures are only worth anything if the reported facts and figures are checked and confirmed by independent and trustworthy third parties. If these checks are rejected, unpleasant surprises are always a possibility.

The responsibility therefore lies not only with the supervisory authorities, it also lies with investors, crypto companies and the investors themselves. Faith alone is not a virtue, but rather a negligent omission, which in the worst case must be paid very dearly.

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