A Crypto-Focused Bank? Tell Me More…

Gregory Mall, AMINA Bank Ltd., discusses a “crypto bank,” how they stay compliant and manage the regulatory environment, and a new index that aims to provide returns similar to Bitcoin while reducing volatility and extreme drawdowns.

The interview was conducted by CoinDesk Indices and is not associated with CoinDesk editorial. Authors' views and opinions are their own and not associated with CoinDesk Indices, nor AMINA Bank Ltd.

It’s interesting that a bank is bullish on cryptocurrencies. Can you elaborate a little more on the bank and what its objectives are?

First and foremost, we are a crypto bank. Our mission and vision have always centered around cryptocurrency—it's in our DNA. Unlike traditional banks that venture into crypto as a side business, it is the core of our operations. That said, we also offer all the core services a traditional bank provides. In other words, we are a traditional bank for crypto clients and a crypto bank for traditional clients.

Our vision has always been to build a bridge between the traditional financial world and the new digital landscape. We focus on simplifying banking with our motto, “Crypto Banking Simplified.”

Our client base consists of a mix of institutional and professional investors, including crypto-natives, foundations, and traditional investors. Among our clients, we also count numerous corporates and traditional banks, using our B2B solutions. Many traditional banks recognize the significant opportunities in the crypto market but face regulatory requirements, crypto infrastructure and the need for extensive resources and expertise. They need a partner like us—regulated and knowledgeable about the crypto asset class. This makes us a valuable partner for these institutions.

What specific cryptocurrency services do you offer your clients and how do you manage the compliance/regulatory process behind them?

We provide comprehensive banking services, including lending, securities, and brokerage—everything you'd expect from a traditional bank. On the crypto side, we offer custody solutions and trading through our in-house platforms. Additionally, we provide 24/7/365 customer support and a dedicated OTC options desk for derivatives trading. A significant aspect of our services is asset management, where we aim to position ourselves as a crypto product provider, making cryptocurrency more accessible to traditional investors who prefer not to deal with self-custody or other associated complexities. They can purchase our products directly from their bank accounts as they do for other products and in that way, we simplify crypto banking and give access to crypto to more investors.

Regarding Compliance and relevant applicable regulations, we apply the industry standards such as KYC and AML checks that are used by traditional banks. However, as we mainly deal with crypto, there are additional challenges. There are specific rules and guidelines for crypto assets and as the domain is new, they need to be interpreted and implemented. For example, when we receive crypto funds from a client, we assess if these coins are “tainted,” meaning, if they have been involved in any illicit activities. We screen these coins using publicly accessible blockchain data, allowing us to trace their activity and ensure compliance as part of our screening process. This is just one example to illustrate the challenges associated with regulated crypto activities.

What can you tell us about the new AMINA CoinDesk BTC Momentum Index?

In collaboration with AMINA, CoinDesk Indices launched a new index, the AMINA CoinDesk BTC Momentum Index (Ticker: BTIAMINA). The primary goal of this index is to provide returns similar to Bitcoin while reducing volatility and extreme drawdowns. Studies, such as those conducted by Fidelity, show a strong interest in digital assets among traditional investors. However, many of these investors are concerned about the high volatility and significant drawdowns associated with this asset class. The index addresses these concerns by employing a dynamic allocation strategy between cash and Bitcoin, thereby reducing overall volatility. The index can be used as an underlying for innovative products.

This approach is 100% transparent and systematic, with no element of discretion. Market research illustrates that crypto investing is often influenced by mental biases such as loss aversion. By adopting a purely systematic investment method, we can circumvent or even eliminate these biases. The index relies entirely on proven signals with a long-term track record, commonly used in other trading strategies. This is the core idea behind what we aim to achieve with this index.

What knowledge level do your clients have about crypto when they come to you, and do you have any educational resources you provide to them to understand and navigate the cryptocurrency market?

Broadly speaking, we distinguish our clients between the crypto-savvy who are well-versed in digital assets but may lack some banking knowledge, and traditional investors who are interested in entering the crypto space. For the latter group, we offer extensive resources through our research department, which covers a wide range of topics including custody, blockchain, and cryptocurrency. We also provide market analyses, all of which are freely available on our website.

Additionally, we participate in client meetings to explain fundamental concepts, as many traditional investors need education to confidently enter the crypto market. Understanding the basics of Bitcoin and how it works is crucial for them to make informed decisions.

Do the Swiss banking laws allow anyone to work with you or do you have to be Swiss-based or EU-based?

We operate globally from our regulated hubs in Switzerland, Abu Dhabi and Hong Kong. In addition to Switzerland, we hold local licenses in Hong Kong and the UAE. These multiple licenses allow us to operate effectively with boots on the ground in Europe, the Middle East and in Asia.

What haven’t I asked you?

We also have a broader reach beyond the clients we onboard directly. Our listed products are available on our website, and any client with access to the exchanges where these products are listed can purchase them. This allows investors to benefit from our products and expertise even if they are not directly onboarded with us.