Lukas Enzersdorfer-Konrad (Bitpanda): "Customers want more transparency".
Founded in 2014, crypto platform Bitpanda has become one of the leaders in Europe. It is counting on MiCA regulation and the development of partnerships with traditional financial players to continue to grow, as its deputy CEO explained to us in an interview.
The Big Whale: Bitpanda is a bit of an animal of its own in the crypto universe. You make it possible to invest in cryptos, but also increasingly in more traditional assets. Why do all this?
Lukas Enzersdorfer-Konrad: Bitpanda was created nearly ten years ago primarily to enable people to invest in cryptocurrencies. That was our original mission. It has gradually been extended to financial securities such as equities because we believe in the convergence of the two worlds.
Equity investors are increasingly interested in cryptos to get more yield, and crypto investors increasingly want equities to get more diversification.
What is the split between crypto and more traditional assets?
It's roughly 80% for cryptos and 20% for traditional assets, and this part of our business is only growing. We need to become the go-to platform in Europe for anyone who wants to invest in a share or cryptocurrency. In almost ten years, we've never had a single incident or problem, which is why people trust us.
Bitstamp says it's the "best regulated crypto platform on the planet". So do you. Who's right?
We have numerous licences and not just in crypto. We have a European e-money licence, we operate a Mifid2-registered investment company (a directive concerning markets in financial instruments, editor's note). We're registered as a crypto platform pretty much everywhere in Europe, including France.
Are you planning to go outside the EU?
We're focused on our European market. There are many opportunities outside Europe, but for us Europe is the most promising market.
What are the main differences between Europe and other areas?
Consumer behaviour is not the same. Even though Europe is the richest region on the planet, Europeans are far from being the best educated when it comes to financial issues.
They are not as sensitive to these issues as the Americans or the Japanese, so we need to support them, explain how it works, especially in France. People need partners they can trust to invest.
What's your marketing strategy? It's fundamental in this ecosystem.
In general, we focus on one country, then afterwards we open another. We believe that this is the only way to build a network and a strong brand over the long term. Every country is different, so you have to understand what customers want, what they like.
You've raised just over $250 million in 2021. How far have you got? Are you affected by the Bear Market?
We raised a lot of money because we have a long-term project. Our previous round of funding enabled us to improve the product and expand in Europe. The Bear Market is obviously having an impact, and that's normal. But we have anticipated this situation, we have reserves and enough to get us through what is not our first Bear Market.
How have you adapted in practical terms?
Last year, we acknowledged that 2023 would be a complicated year, so we are focused on regulation and developing new products. We have just announced several new financial products such as CFDs (contracts for difference allow you to bet upwards or downwards on an underlying asset without actually owning it, editor's note).
Isn't it dangerous to offer such speculative products?
They're not open to everyone, and the aim is to continue to offer the widest possible range of products.
Have you benefited from FTX's fall?
We've seen new customers coming in. Customers want more transparency, to know where the company is based, how it works, so they go to platforms like Bitpanda.
Many private individuals have left CEXs to keep their cryptos themselves. What are your thoughts on this?
Custody in one's own name is very important, but not everyone wants it and especially not everyone can do it. We need platforms to provide them with this type of service.
What do you think of Proof-of-Reserves?
It's a very good thing. The problem is that some people misuse it and give it an importance it shouldn't have. Since 2019, all our wallets have been audited by KPMG every quarter. It's important for us to provide this kind of evidence, but it's not the answer to everything.
MiCA has just been definitively adopted. What do you think of it? Is it a good thing?
The adoption of MiCA is an excellent thing. This text, which is unprecedented on a global scale, will make it possible to harmonise legislation on a European scale and therefore facilitate the development of European players. Every company will be able to transfer its registration to other countries. MiCA will also bring security and visibility for traditional players who don't dare to enter this world.
Do you think that banks will become less 'skittish'?
Banks are surely the most regulated players on the planet, so they want to work with players who have standards equivalent to their own.
However, this hasn't stopped several American and European banks from collapsing...
American regional banks are less regulated than European banks.
Some banks and platforms close their customers' accounts. Bitpanda has also done this. Why?
There are two issues. The first concerns anti-money laundering obligations. All the players involved must comply with control rules to find out about customers and identify suspicious flows. If a customer does not comply, we are obliged to close their account. It's the same for banks.
Not many people know this, but you have your own blockchain, called Pantos. What's the point?
We launched the Pantos project in 2018 because we had identified a real need on the part of start-ups in the ecosystem. When you launch your own token, you need to know from the start which blockchain you're going to use. Ethereum, Solana?
Three or four years ago, the issue of interoperability was complex. That's why we came up with the idea of this multi-chain protocol that would allow start-ups to transfer a token from one blockchain to another without having to kill a token to create another.
How exactly does Pantos work? What's the point?
Projects can use the Pantos smart contract and transfer their tokens from one blockchain like Ethereum to another like Solana.
Is this technology live?
It's still being tested, but the launch is planned for the end of the year.
Do you have any other projects in the pipeline?
We have others, but we don't want to move too quickly. Our main objective is to continue developing the trading platform. We offer more than 250 cryptocurrencies, we also have a staking offer, but we can do a lot more.