Berlin-based Crypto Custodian Finoa Expands Services to Provide Regulated Access to DeFi

11:21 am
September 12, 2023

Finoa, a cryptocurrency custody firm based in Berlin, has announced that it will offer regulated access to decentralized finance (DeFi) through its custodial wallet infrastructure. This move comes after Finoa received regulatory approval from the German financial regulator BaFin earlier this year. The new offering, called FinoaConnect, will allow Finoa’s institutional clients to easily access a curated list of permissioned DeFi platforms, web3 applications, and blockchain governance scenarios.

Wallet Integration with Regulated DeFi Platforms

Traditional financial institutions are now able to participate in DeFi lending pools and automated market making. However, they must comply with transparency requirements regarding their trading counterparts. This has given rise to a more regulated subset of DeFi that incorporates enhanced measures such as anti-money laundering (AML) procedures, digital identity verification, and whitelisting of lending partners.

Finoa’s founder, Henrik Gebbing, stated that there has been a significant increase in demand from clients to enable decentralized applications within Web3 environments through their custodial wallets. After evaluating existing wallet solutions, it was determined that they did not meet Finoa’s security and transaction integrity standards. As a result, Finoa decided to develop its own solution, FinoaConnect, on top of its existing proprietary technology.

A key feature of FinoaConnect is its regulatory compliance. Finoa does not simply connect its wallets to any available decentralized application in the permissionless DeFi space. Instead, it offers a carefully curated selection of decentralized applications (dApps) that meet the needs of regulated institutions seeking a secure and compliant entry point into the DeFi ecosystem. While Finoa has not disclosed the specifics of its curated list, examples of DeFi offerings that align with institutional requirements include Aave Arc, Compound Treasury, and Maple Finance.

Finoa’s expansion into regulated DeFi access reflects the growing demand from institutions to enter the decentralized finance space while ensuring compliance with regulatory standards. By offering a curated selection of regulated DeFi platforms, Finoa aims to provide its institutional clients with a secure and compliant pathway into the rapidly evolving DeFi ecosystem.

FAQ

What is Finoa?

Finoa is a cryptocurrency custody firm based in Berlin that provides institutional investors with secure storage and management solutions for digital assets.

What is DeFi?

DeFi, short for decentralized finance, refers to a range of financial applications and platforms built on blockchain technology that aim to provide traditional financial services without the need for intermediaries like banks. It allows users to access lending, borrowing, trading, and other financial services in a decentralized and permissionless manner.

What is FinoaConnect?

FinoaConnect is a new offering by Finoa that allows its institutional clients to access regulated decentralized finance (DeFi) platforms, web3 applications, and blockchain governance scenarios through their custodial wallets. It provides a curated list of permissioned DeFi platforms that meet the compliance requirements of regulated institutions.

What are permissioned DeFi platforms?

Permissioned DeFi platforms are platforms that incorporate regulatory measures such as anti-money laundering (AML) procedures, digital identity verification, and whitelisting of participants. They aim to provide a more compliant and secure entry point for traditional financial institutions into the decentralized finance space.

Which platforms will be available through FinoaConnect?

Finoa has not publicly disclosed the specifics of its curated list of platforms. However, examples of DeFi offerings that align with institutional requirements include Aave Arc, Compound Treasury, and Maple Finance. These platforms provide the necessary compliance and security features desired by regulated institutions.


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