Cryptocurrency custodian Finoaa has received three license approvals from Germany’s financial regulator BaFin, going against the grain of regulatory clampdowns and uncertainly happening elsewhere in the crypto space.
Finoa, which has been operating under a preliminary crypto custody license since January 2020, also closed a strategic venture round led by new investor Middlegame Ventures and including existing investors Balderton Capital, Coparion, Venture Stars, and Signature Ventures. The size of the investment was not disclosed.
Given the general state of regulatory uncertainty across crypto markets, including the U.S. Securities and Exchange Commission (SEC) recently announced plans to focus specifically on crypto custodians, the seal of approval from BaFin couldn’t come at a better time, said Finoa co-founder Chris May.
“The custody license in particular is a very reassuring message to our customers and differentiates us from many other players in the market,” said May in an interview. “The preliminary regulatory status we have been under since the beginning of 2020 follows the same checkpoints and standards which the SEC followed through on a couple of weeks ago.”
In addition to the custody approval, Finoa received the go-ahead for broker-dealer and prop trading licenses, which allows the firm to trade its own treasury but not against its customers, May pointed out.
Finoa raised a $22 million Series A round back in 2021.
Regarding the undisclosed level of this new funding, May said it wasn’t a major Series B round.
“As part of the license approvals we wanted to strengthen our statutory or regulatory capital,” he said. “Adding some millions to our balance sheet portrays trust to our customers and allows us to leverage the licenses to the fullest.”