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The sale of Crypto Finance AG is one of the most significant deals in Swiss finance in recent years and an endorsement of the pioneering work done in Crypto Valley, but the fact that this endorsement came from outside Switzerland should give pause for thought.
Truth be told folks Jan Brzezek, who founded Crypto Finance with the aim of closing the gap between the world of traditional banking and the digital world of crypto assets, and his team have pulled off a triumph today.
Since starting up in 2017, Brzezek has built Crypto Finance into a company, for a majority stake in which german exchange operator Deutsche borse was this week prepared to pay hundreds of millions of francs.
According to the latest information Deutsche Borse paid closer to 250 million francs ($270 million) than 100 million for the two-thirds stake, valuing Crypto Finance Group at around 400 million francs.
A buyout like this is almost unheard of in the Swiss startup scene. Crypto Finance co-founder and Chairman Tobias Reichmuth, however, assured in an interview that "we didn’t plan the buyout. We were planning a financing round to accelerate our growth in all areas. We’d been in touch with Deutsche Borse for over two years".
In addition to a genuine entrepreneurial achievement there is also a significant element of pie in the sky in this valuation. Deutsche Borse is putting all its money on the construction of a digital-asset ecosystem despite many voices in international finance who dismiss the boom in Bitcoin, Ethereum and other digital assets as wild and short-lived speculation or even a "Ponzi scheme".
The deal is remarkable in many respects from the point of view of the Swiss financial center or, as it now likes to be called, the Swiss financial ecosystem.
However, it was not UBS or Credit Suisse or even exchange operator SIX which gained entry to the digital asset ecosystem by buying Crypto Finance, but Deutsche Borse.
Mattia Rattaggi, the chairman and co-founder of Ficas, the first company to offer an actively managed exchange traded crypto-currency product, said he found this hesitancy on the part of Swiss financial institutions toward adopting cryptocurrencies as an asset class as increasingly difficult to understand.
Lastly, folks The fact is that for the top international financial institutions offering crypto clients services and infrastructure involves a great deal of effort. The short cut lies in cooperation and takeovers, which Swiss crypto and blockchain companies are able to offer.
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