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Ex-UBS Bankers Raise Funding for a Swiss Cryptocurrency Bank

Bloomberg logoBloomberg 9/27/2018 Nour Al Ali
Bitmain Technologies Inc. application specific integrated circuit (ASIC) units sit on a shelf inside the DMM Mining Farm, operated by DMM.com Co., in Kanazawa, Japan, on Tuesday, March 20, 2018. Japan is moving toward legalizing initial coin offerings, even as countries such as China and the U.S. restrict the fundraising technique because of their risks for investors. A government-backed study group laid out basic guidelines for further adoption of ICOs, according to a report published on April 5.: Inside The DMM Mining Farm As Japan Unveils Guidelines For Allowing Initial Coin Offerings© Bloomberg Inside The DMM Mining Farm As Japan Unveils Guidelines For Allowing Initial Coin Offerings

(Bloomberg) -- Seba Crypto AG, a Swiss financial services company run by ex-UBS Group AG bankers, said it raised money as it seeks to become one of the world’s first regulated banks to let consumers easily swap dollars and euros into cryptocurrency.

The Zug-headquartered company said it secured 100 million Swiss francs ($104 million) from private and institutional investors for the venture, which is dependent on being granted a banking license from Finma, the Swiss financial regulator.

Chief Executive Officer Guido Buehler, who previously worked as a managing director of asset servicing at UBS, said his company has been in talks with Finma since April. A final application for a license will be submitted by the end of October, he said.

Seba’s new chairman Andreas Amschwand, a former UBS global head of foreign exchange, will step down from the board of Julius Baer Group Ltd in 2019.

Switzerland is attempting to embrace cryptocurrency by positioning the lakeside town of Zug -- a canton best known for low corporate tax rates -- as “crypto valley.” Finma issued guidelines earlier this year to companies wishing to raise money by selling their own digital currencies, after shutting down several coin providers for working without a banking license.

Read: Medieval Zug Bets on a Cryptocurrency Future

A spokesman for Finma said the regulator has seen an increase in license applications from crypto-related companies. "We are looking at every application and pursue a neutral approach to business models and technology," he said.

Black River Asset Management AG and Summer Capital are among the mix of local and international investors backing Seba. Buehler said some of the money will be used to create the new financial entity, while the rest goes toward capitalizing the bank so it can offer investment protection.

The company employs 17 people and plans to more than double this figure by the end of 2019, Buehler said, with plans to expand to Singapore and Europe next at an undetermined time, and to raise additional funding once a banking license is obtained.

Buehler said he intends for Seba customers to be able to hold and trade both fiat and cryptocurrencies, as well as for the bank to offer investment and asset management services. “Our vision is when you log in into your online banking, you’d have access to crypto and fiat within one account,” he said.

The value of digital currencies has plumbed to new depths over the past few months, and has now surpassed the Nasdaq Composite Index’s 78 percent peak-to-trough decline after the dot-com bubble burst in 2000. But Amschwand isn’t overly concerned.

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

(Updates to add chairman role.)

--With assistance from Jan-Henrik Förster.

To contact the reporter on this story: Nour Al Ali in Dubai at nalali1@bloomberg.net

To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Nate Lanxon, Andrew Pollack

©2018 Bloomberg L.P.

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