- N26, a German-based online banking giant, is disappointed about its ignorance of the booming crypto market.
- As a turnaround, the company plans to launch a crypto trading business and equities brokerage within the year.
N26, a 7.8 billion euro (about $8.8 billion) fintech company, is now part of the lot that regrets ignoring the crypto market for way too long. Co-founder and co-CEO Max Tayenthal says the German company laid too much emphasis on “putting flags” all over the world, rather than investing in the crypto boom.
N26 was established as a highly prospective online lending firm in the past decade. It is now one of Europe’s most valued fintech, with the likes of Peter Thiel’s Valar Ventures and Li Ka-Shing among its investors. N26 has expanded its roots, now offering services to 7 million customers in 24 countries. Despite these impressive numbers, the company has found fault in itself for failing to provide crypto and equities trading services.
“Should we have built trading and crypto instead of launching in the US? In hindsight, it might have been a smart idea,” Tayenthal told the FT in an interview, adding, “We were spreading ourselves extremely thinly.”
The country recently withdrew operations from the US, citing a need to redirect its focus to its core European business.
N26 prepares for the crypto industry
With the regrets, comes the 2022 resolution to launch a crypto trading business and equities brokerage. Here, the company may need to further re-organize its regulatory compliance measures, since regulators are seeking intensive oversight on the crypto industry.
Already, the company had its regulatory troubles last year with German watchdog BaFin for various shortcomings, such as poor anti-money laundering controls. BaFin proceeded to place a 50,000 limit where N26 had an average of 170,000 new clients per month. This restriction, according to the regulator, will only be lifted once the company proves its compliance and risk mitigation abilities. Additionally, BaFin, in a rare move, appointed two special representatives to track improvements at N26.
On this matter, Tayenthal has asserted that the company will have the cap fully lifted by late summer. He says N26 has placed effort in “massively” raising the bar of its anti-financial crime capabilities in the past year. However, he acknowledges that “certain aspects” still need to be worked on.
Additionally, Tayenthal notes that investors were fully aware of these restrictions before the firm’s latest funding round. N26 raised 780 million euros last year, boosting it to its current valuation, and placing it at par with Commerzbank, which has 541 billion euros in assets.
Presently, the company is readying for a stock market listing by year’s end. The co-CEO, however, says plans could change in the year.