April 17, 2024

Top German-Based Online Bank Plans To Launch Crypto Services This Year

An almost $9B valued German-based online bank, N26, has announced its regrets at not entering the crypto market early enough.

Wrong Decisions And Regrets

An influential executive of the company, Max Tayenthal, claimed that the company was too focused on the red flags instead of being among the early adopters of the digital asset boom. N26 was founded ten years ago as an online lending platform. But investments from top venture capitalists such as Peter Thiel and Li Ka Shing have helped the company expand its services and reach a more global audience to become one of the top fintech firms across Europe.

The company now has a presence in 24 countries and boasts nearly 7.5 million users. Despite its achievements in the last decade, the firm regretted not heeding its customers’ requests in offering crypto-related services. Speaking during a recent interview, Tayenthal claimed that “it would have been a better idea if we didn’t launch in the US but launched a crypto and forex trading platform. We didn’t know we were extending ourselves thinly.” After several false starts, N26 eventually paused its operations in the US, stating that it would prefer to have a more established presence across Europe before launching on American soil.

A Resolution For The New Year

After revising its past decisions, N26 has resolved to have a crypto-related business involving trading platforms and exchange services. However, the firm needs to realize that it needs to be more acquainted with crypto-related policies as regulators continue to enforce stringent crypto laws.

N26 has already had a running battle with Germany’s financial regulator, BaFin. Bafin accused N26 of having a porous anti-money laundry protocol. The regulator limited N26 to only 50k new clients monthly, which is a far cry from the 175k new customers that it usually gets monthly.

However, Bafin states that it would lift the limit immediately if the firm convinces the agency that its compliance and risk mitigation measures are strong enough. Furthermore, Bafin is also monitoring N26 operations. Through its two appointed reps, Bafin can closely monitor N26’s operations. 

Lifting The Limit Will Happen Latest By Summer – Tayenthal

According to Tayenthal, the company has been putting in all efforts to become stricter with enforcing its anti-money laundering policy since 2021. Hence, he fully believes that there would have been significant improvements that would ensure that Bafin lifts all limits on N26 by June 2022. He further revealed that the firm’s VCs in its just-concluded funding round were duly notified about the limits. 

Last year, N26 raised $884m from all its funding rounds which have helped to enhance its worth, expand its services and reach and almost have similar amounts in assets with Commerzbank. While Tayenthal disclosed that part of the company’s plan for this year to become a publicly-traded company, he acknowledged that nothing is written in black and white, and there might be changes before the year is over.

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