Crypto Investors Try Forming First Regulated Bank, in Malta

Binance, one of the world’s biggest cryptocurrency exchanges by traded value, is seeking to lay the groundwork for a new bank whose owners will be digital-coin investors.

The crypto-friendly island of Malta will be home of the future Founders Bank, Binance said, adding that it has taken a 5 percent stake alongside other anchor investors at a 133 million-euro ($155 million) pre-money valuation, in emailed comments to Bloomberg.

Founders Bank would conduct its offering through the blockchain-based equity fundraising platform Neufund, issuing its own “legally-binding equity tokens.” The bank would need a license from regulators in Malta, a member of the European Union, and approval from the European Central Bank.

“This is fascinating, as a concept,” said Marc Ostwald, global strategist at ADM Investor Services International in London. “Obviously, they’ll have to meet anti-money-laundering regulators. The question will be, how do regulators view this?”

New Maltese Laws
“We are honored to be chosen as the location of the first global community-owned bank,” said Silvio Schembri, junior minister for financial services, digital economy and innovation within the Office of the Prime Minister of Malta, according to a Binance statement Thursday.

The equity-token sale would be conducted under German regulations in collaboration with one of Europe’s major stock exchanges later this year, Binance said, without identifying the exchange.

The news comes a week after Malta passed three laws aimed at encouraging blockchain-based businesses to set up in the country. Binance said in its statement that the bills “created a fertile environment for blockchain companies and cleared the uncertainties surrounding the market for decentralized assets.”

“I don’t think it’s out of order to call this a seminal moment,” ADM’s Ostwald said.

Read more: World’s Largest Crypto Exchange Eyes $1 Billion Profit Amid Rout

— With assistance by Edward Robinson