Swiss crypto exchange aims for IPO

Swiss crypto company Smart Valor has recently raised CHF3 million from investors as part of its plans for a public listing.

Co-founder and chair Olga Feldmeier told me the company is looking at a range of European exchanges on which to list, including Deutsche Börse and Swedish-based Nasdaq First North Growth Market.

Nasdaq First North has hosted three crypto initial public offerings (IPOs) already this year: Coinshares, Safello and Xpecunia. All these listings were heavily over-subscribed at a time when the cryptocurrency market had witnessed spectacular price gains.

In April, the US crypto exchange Coinbase caused a stir by raising $86 billion by listing on Nasdaq. Smart Valor has a more modest two-digit million target from its proposed IPO.

Feldmeier is confident that Smart Valor has boosted its balance sheet enough with its latest funding round to pass muster at most exchanges. But she would not be drawn on the timing of an IPO.

“The blockchain technology, as every other early-stage technology, currently still has a bit of mixed reputation,” she said. “As an authorised exchange and custodian we practice stringent corporate governance which helps to gain trust of our customers. As a bridge between the decentralised economy and consumers we are in the business of trust. This goes hand-in-hand with a public listing.”

DLT exchange license

Other companies are also eager to escape the sometimes murky shadows of the cryptocurrency industry. Having failed to gain a Swiss banking license earlier this year, Bitcoin Suisse now says it wants to go public in the near future.

Set up in canton Zug’s “Crypto valley” in 2017, Smart Valor is also eyeing up a distributed ledger technology (DLT) stock exchange license in Switzerland. “It’s a state-of-the-art license. No other country has created such an advanced regulatory framework for blockchain based exchanges today,” says Feldmeier.

As I said in my last newsletter, it’s been all but impossible to set up a cryptocurrency exchange in Switzerland in the past without a banking license. Smart Valor, Lykke and Swissborg have all found it easier to operate elsewhere in Europe despite having Swiss HQs.

Smart Valor runs its asset management business from Switzerland and currently operates exchange services from neighbouring Liechtenstein – where it is also applying for a license to issue digital securities.

Empty space

More widely known exchanges, like Binance and Bitfinex once tried their luck with the Swiss regulator but decided against the move. For a long time, this was a noticeable empty space for a country that markets itself as “Crypto Nation”.

The new Swiss DLT exchange license, unveiled on August 1, now provides another option – with the added benefit of being able to trade digital securities to the general public. This might produce some competition for the SIX Digital Exchange, which was awarded a license to operate last month.

I will explore the theme of how Switzerland plans to gentrify cryptocurrencies in an article on SWI Swissinfo.ch soon, so watch out for it.