By
Steve Muchoki
April 19th, 2024
Austrian fintech unicorn Bitpanda secures local license to provide custody and proprietary trading services to German citizens.
Bitpanda recently secured a German crypto license to offer custody and proprietary trading services in the European nation. Expounding on the licensing development, the Austrian crypto exchange and multi-faceted trading platform explained:
“Additionally, Bitpanda will be able to maintain an order book and directly market services for crypto assets, enabling them to provide a secure and regulated environment for German customers to invest in a wide range of cryptocurrencies.”
Bitpanda obtained the license from the German Federal Financial Supervisory Authority (BaFin). Furthermore, this development comes in the aftermath of the epic collapse of Bahamian-based crypto exchange FTX.
According to Bitpanda co-founder and chief executive officer Eric Demuth, the German license was months in the making. Also, alluding to reports that FTX diverted customers’ funds towards propping up sister firm Alameda Research, Demuth said:
“That means being regulated, and it means a strict separation of customer and company assets, which is sadly not the case everywhere these days.”
Bitpanda Became Austria’s First Unicorn Over a Year Prior to German License
Last year, Bitpanda became the first fintech unicorn from Austria, and has already secured regulatory approval in several European countries. These include Austria, the Czech Republic, France, Italy, Spain, Sweden, and the United Kingdom.
For its billion-dollar market cap, Bitpanda raised $170 million in Series B funding in March 2021 and earned a $1.2 billion valuation. Andrew McCormack, James Fitzgerald, and the Peter Thiel-founded Valar Ventures were lead investors in that fundraiser. In addition to the VC fund, the partners of DST Global also played a participatory role in the exercise.
Speaking on Bitpanda’s funding round at the time, Demuth noted:
“Retail investors will soon be able to access an even larger range of digital assets, and we already have plans in place to bring our offer to several new markets.”
In September, Bitpanda also concluded its $52 million Series A funding round, also led by Valar Ventures.
FTX Fallout & Proposed EU Crypto Legislation
Meanwhile, regulators across the globe have been paying close attention to the crypto space, which is still reeling from the effects of FTX’s demise. Nonetheless, Germany, as a member of the European Union, finalized its holistic framework regarding the supervision of crypto issuers and service providers last month. This development implies that issuers and service providers may soon be able to operate in any of the trade bloc’s 27 member states.
Dubbed Markets in Crypto Assets (MiCA) legislation, the project aims to be the global standard for crypto regulation, according to German lawmaker Stefan Berger. Although Berger guided the draft legislation through the European Parliament, the MiCA will not take effect until 2024. In addition, although the comprehensive framework is a finalized version, the text remains open to comments.
Despite the perceived protracted nature of implementing the MiCA legislation, EU member states like Germany and France continue to issue local regulatory licenses.
The crypto space currently sees an insolvency crisis in addition to a long-drawn-out systemic devaluation of popular tokens, most notably Bitcoin.