Crypto Changes in Zug
The Swiss crypto broker is abandoning its heady start-up days as it becomes more enmeshed with traditional finance. Its handling of Swiss sanctions on Russian money represents a key test amid a management handover.
4. März 2022 • Katharina Bart

2022 was to have been the year of reaping the fruits of its efforts to embed itself into the traditional finance industry: heading into its ninth year, the tone at Bitcoin Suisse was of looking forward after the painful setback to its bid to become a bank nearly one year ago.

Dramatic changes in the C-suite underscored this: CEO Arthur Vayloyan and Chairman Niklas Nikolajsen are stepping down within months of each other, and Bitcoin Suisse replaced most of its management last year, in the wake of its falling short of its regulatory plans. The 47-year-old Nikolajsen, whose co-founders Andrej Majcen and Fabian Hediger were still students when the trio launched the company in 2013, remains honorary chairman.

Bitcoin Suisse – which is storming towards 50 million Swiss francs ($54 million) in net profit for 2021 – clinched a key partnership with European giants Worldline last year. It also rolled out Lightning, a network to enable transactions in crypto between participants not on blockchain, as a token payment option. And Bitcoin Suisse clients staked a total of $2 billion in crypto, the company said last year. Valued at upwards of 400 million francs, it counts several big names including ex-Vontobel investment banking chief Roger Studer among its investors.

Kibosh On Banking Plans

The efforts as well as its rude financial health represent a bid to retrench, after Finma put the kibosh on Bitcoin Suisse’s plans for a banking license. The Bern-based financial regulator had cited concerns over the crypto broker’s ability to spot and fight money-laundering in its clientele.

Russia’s invasion of Ukraine has complicated Bitcoin Suisse’s plans, and offers a chance to prove that it has graduated from its furious start-up phase to a more mature, stable company structure. Bitcoin Suisse has set up a task force to ensure that it complies with Swiss sanctions on Russian business, a spokesman said, without elaborating. It ounts more than 300 employees, more than one-third of whom are in technology – the company built and maintains its own systems – or development.

Dirk Klee is poised to replace Vayloyan as CEO in four weeks. The ex-operating chief of UBS’ flagship wealth unit, Klee represents the latest in a series of traditional bankers to head for Bitcoin Suisse: others include his predecessor, Vayloyan, and trading boss Lothar Cerjak, both former Credit Suisse executives, as well as Markus Perdrizat, an ex-UBS banker. Only the vestiges of a close-knit group around Nikolajsen remain in top management: namely Majcen, who is head of client services.

A Danish computer programmer who is in the final stages of naturalizing in Switzerland, Nikolajsen is easily the most identifiable figure in “crypto valley” and has worked tirelessly to establish and to promote Bitcoin Suisse. “Large scale adoption by institutions and consumers has become reality,” he said upon stepping down. The flamboyant father of two young children, Nikolajsen is Bitcoin Suisse’s largest shareholder.

Russia Task Force

Nikolajsen has a host of other projects to attend to, including a costly refurbishment of a historical landmark on Zug’s lakeside set to conclude next year, and a family office for his wealth, which Swiss publication “Bilanz” puts at 350 million francs. He also has a roster of eyebrow-raising hobbies including firearms and recently invited the public to inspect a rare, $600,000 World War II “Hellcat” tank destroyer he named after his mother-in-law.

The company’s Worldine deal opens the door to 85,000 merchants to adopt crypto as a payments option if they wish to. On Thursday, the Swiss city of Lugano joined Bitcoin Suisse’s native Zug in accepting bitcoin for tax bills and other city services. Today, Bitcoin Suisse oversees 7 billion francs in assets and recorded 70.3 million francs in revenue for the first six months of last year on the back of its crypto trading platform.

CEO-designate Klee hinted that he would take Bitcoin Suisse down a more technology-focused road, telling Swiss outlet that the more interesting aspect of crypto is its underlying workings and how else it could be applied. This view is more akin to how UBS would view digital assets than a successful crypto start-up would.