The Swiss crypto bank is grappling with start-up woes: it will ditch its co-CEO model amid wider management changes. Meanwhile, its push into tokenization is overshadowed by bumpiness in key projects.
The Zurich-based bank last week unveiled a platform to issue and trade tokens on everything from fine wine to property and venture capital investments. The move is a milestone in Sygnum’s efforts to win institutional clients and get coins into money portfolios.
Behind the scenes, the Swiss bank’s year has been rockier than expected, Sygnum co-founder Mathias Imbach will take over as CEO from January, based in Zurich full-time, he told finews.com. Co-founder Manuel Krieger (pictured below) is leaving top management, though remains a director.
Krieger will focus on technology and asset management as well as people and culture, Imbach said. Meanwhile, Fabian Dori led the bank’s IT for the first two years, is ceding the job to Philippe Imbach, who is the brother of one of Sygnum’s founders.
Prominent Backers
Philippe Imbach will report to Dori and not to Mathias Imbach, who told finews.com he recused himself from the recruitment process. The decision by Sygnum to install the co-founder and CEO’s brother into top management nevertheless baffles from a governance perspective.
Sygnum is overseen by co-founder Luka Mueller, a prominent Swiss crypto and blockchain lawyer. It counts ex-central banker and potential OECD head Philipp Hildebrand as well as former UBS CEO Peter Wuffli among its backers.
Mirrored By Rival
With several hundred million Swiss francs of crypto, stablecoins, and asset tokens under management 15 months into life as a bank, Sygnum is losing operating chief Stephan Kunz at year-end. Martin Jost, until now product and portfolio manager, is taking over for him.
To some extent, the changes and issues are part and parcel of the hectic life of a start-up – mirrored at Zug-based rival Seba, as finews.com reported last month. Sygnum’s attrition, which insiders note is lower than Seba’s, comes against the backdrop of delays in a key division: storage of digital assets.
Storage Options
The first hint surfaced four weeks ago when Taurus, a Geneva-based start-up, said it won Sygnum as a storage client. The move raised questions over the crypto bank’s main partner, Custodigit. Sygnum and Swisscom teamed up two years ago to found Custodigit, but progress has been glacial, according to several people familiar with the matter.
The bank also said it will start trading and «staking» (or validating) Tezos coins – using Taurus. The storage option offered by Custodigit has been mired by complications: The issue appears to be differing timelines for the rollout, as well as changes in Sygnum’s information technology, these people said.
Swisscom, the incumbent telecom firm which has been pushing deeper into business services including blockchain and digital assets, didn’t comment on delays.
Road To Break-Even
Sygnum’s Imbach said the bank had opted for a multi-custody set-up in order to offer other banks the widest possible range of features. Custodigit’s stability, long-term strategy, and government backing through parent Swisscom are key for Sygnum, Imbach noted.
Sygnum, which hasn’t publicly disclosed break-even goals, tapped investors this year for an undisclosed amount, Imbach said. It isn’t expected to be profitable before 2022 or 2023. «We always differentiate between ‘build’ and ‘run’ the bank,» Imbach said. «We’re still investing significantly in the further build-out of our banking platform to the benefit of our clients.»
Limited Coin Reach
The start-up bank’s launch of a stablecoin on the Swiss franc, DCHF, in March is an example: the coin only works if both counterparties are Sygnum clients, limiting the project’s reach. Imbach told finews.com that the coin’s second phase – ongoing – aims to open it to regulated counterparties like banks and broker-dealers, exchanges, or multilateral trading facilities.
In a third phase, Sygnum envisions shopping online with DCHF (it launched a modest pilot project with Swiss retailer Galaxus). Imbach declined to detail when the third phase would roll out. In reality, the stablecoin’s major role is likely to be an enabler for Sygnum’s recently-launched token platform.
