Avant-garde

27.08.2019

 

This article was published in the Ergon Magazine SMART insights 2019. You can order the complete Magazine here.

Digital change is certainly ubiquitous, but does it present a threat or an opportunity? Crypto Finance AG is seizing the opportunities. Launched only eighteen months ago, FINMA has already granted the company a licence to operate as an asset manager. They anticipate imminent change in global banking under the motto “collaboration, not competition”. Jan Brzezek, CEO of Crypto Finance AG, explains how this works.

Who would have thought 15 years ago that modern mobile phones would make payments, transfer money, book tickets, take photos, record video, play movies and download and upload data? And who would have thought 25 years ago that the customers of today could conjure up their very latest bank statements at the touch of a button, anytime, anywhere? Believe it or not, blockchain and cryptocurrencies are driving a similar revolutionary change right now, with wide-ranging consequences for each and every individual in society – indeed, for the whole world.

Well positioned

Since its foundation in 2017, Crypto Finance AG and its subsidiaries, including Crypto Fund AG, have been ­supporting banks with investment instruments. Crypto Broker AG is a trading entity that works on behalf of banks, and Crypto Storage AG looks after the digital storage of securities. Switzerland seems to have been predestined for the latter in particular, as the whole ­intermediated securities business is conducted as thoroughly and reliably here as a land registry office or similar establishment; and a blockchain-based solution is eminently suitable for such transactions.

From milestone to milestone

”When we began our work in 2017, the first thing we did was invest heavily in first-class infrastructure. As a small firm, we are highly agile and can react quickly and reliably to changing circumstances. As an asset manager, governed by the Collective Investment Schemes Act, our Crypto Fund AG is already FINMA-regulated; and we have taken the lead with our new cryptocurrency trading platform and its impressive computing capacity”, says Brzezek. “We take advantage of the security and good reputation that Switzerland has as a banking location and we want to live up to its high standards. We don’t run our cryptocurrency trading platform as a competitor to conventional banking. Instead, we think of our services as a complement, so we’re not working against the established banks, we’re working with them.”

“Blockchain and cryptocurrencies will have wide-ranging consequences for the whole world.”

Jan Brzezek, CEO, Crypto Finance AG


Going live in just five weeks

“We already had the idea, the concept, of how we wanted to build our new cryptocurrency trading platform but we were looking for a partner capable of getting the project up and running to our specifications – and doing it reliably, with no excuses or mistakes – so we could actually begin trading,” Brzezek recalls. “Ergon was recommended to us and we wanted to find out about the firm and get to know the people. After a few workshops, in which we developed our project further with them, and had the opportunity to go through some constructive questions, we were convinced about their specialists’ professionalism, dedication and determination to establish a first-class, top-quality and ground-breaking project. We knew we had made the right choice and we made unbelievably quick progress together. Working with Ergon was a real pleasure. Everything they promised us was indeed delivered – on time and with impeccable quality.”

Today – and tomorrow

Crypto Finance AG has managed to establish itself quickly. “Anyone who has anything to do with crypto­currencies will know that we are among the very best. To achieve this, we needed initiative, speed, and professionalism. Crypto Finance AG has done everything right,” says Brzezek, who sees genuine potential in his company. “Cryptocurrencies are one part of the equation, tokenisation is the other. Tokenisation will enable the efficient and transparent transfer of physical and non-physical assets between anyone at any time, as email does today. Tokenisation is another step towards democratising access to investment options that have been off limits to all but the wealthiest investors until now.”

Key points at a glance

Challenges

  • First fully functional software version available in just five weeks
  • Transparent reporting for traders and clients
  • Robust controlling
  • Generic tracking and mapping of IDs

Idea & concept

  • A platform that can “intelligently” execute cryptocurrency transactions using algorithmic trading
  • Order placement across various exchanges according to an algorithm
  • Potentially offer, implement and configure different algorithms for different parameters

Approach

  • “Cobra” order management and execution platform
  • Expansion to include bookkeeping for client assets; connection to Crypto Storage platform
  • Crypto Asset Trading portal (CAT) as web portal for clients

Techs & tools

  • Domain-driven design/micro­service architecture
  • Java with Vert.x and Jooq in the backend
  • Angular UI in cooperation with the UX team
  • Security with Airlock WAF/IAM

Wow

  • A “core banking system” created for cryptocurrencies
  • A modular, scalable solution
  • Expansion to include an end-user portal in just two months
  • Development of an algorithmic crypto stock exchange trader
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