Former UBS Executives Raise $104m to Create Regulated Crypto Bank

Former UBS executives raised $104 million to operate Seba, a strictly regulated crypto bank, with a banking license from Finma, the Swiss financial regulator.

The infrastructure of the cryptocurrency exchange market is improving rapidly with Bakkt, Coinbase, and major US-based banks like Citigroup, Morgan Stanley, and Goldman Sachs that have recently released their plans to operate crypto custodian solutions.

Market Decline is Not an Issue

Seba CEO Guido Buehler, a former managing director of asset servicing at UBS, stated that the company has already initiated the process of filing a banking license with Finma and is planing to file the final application by the end of October.

Speaking to Bloomberg, Finma spokesperson said that the agency has seen an increase in license applications from cryptocurrency businesses over the past few months and will issue licenses solely based on the business models and technologies employed by the companies.

“We are looking at every application and pursue a neutral approach to business models and technology,” the spokesperson said.

The all-star team of Seba led by CEO Buehler and chairman Andreas Amschwand, the former UBS global head of foreign exchange, currently employs 17 individuals and by the end of 2019, the company intends to appoint 17 more employees to expand to Singapore and Europe.

Already, Seba has raised $104 million from private investors and venture capital firms including Black River Asset Management AG and Summer Capital. As soon as the license is approved by Finma, the company will seek additional funding from investors to capitalize the bank and ensure it can protect the funds of its customers.

Seba is an investment bank and cryptocurrency exchange hybrid, allowing customers to hold and trade fiat and cryptocurrencies by relying on the company’s investment and asset management services. Structurally, Seba will operate similarly as major banks like Goldman Sachs and UBS in that it will offer traditional investment and asset management services tailored to cryptocurrency investors.

“Our vision is when you log in into your online banking, you’d have access to crypto and fiat within one account,” Buehler said.

In regards to the period in which Seba decided to launch its services and file an application with Finma, Buehler emphasized that the cryptocurrency market correction of 2018 poses no concern for the company and for its investors, as the short-term price movement of cryptocurrencies do not affect the long-term validity of the asset class.

“Market decline isn’t impacting my view. Short-term volatility does not undermine long-term validity of digital assets,” he added.

One of a Kind

Coinbase, Bakkt, BitGo, Goldman Sachs, and many other major financial institutions are currently working to strengthen the infrastructure of the cryptocurrency market. But, Seba offers a unique range of products that were previously not available to the cryptocurrency market, which may increase the interest of investors in the traditional finance sector towards cryptocurrencies.

As SEC commissioner Hester Peirce said, investing in cryptocurrencies through exchanges requires a specific set of knowledge and know-how and the vast majority of investors do not have that information to readily invest in the asset class.

Images from Shutterstock

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