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How to select a compliant cryptocurrency savings platform in Europe

If you are a European investor in any asset class, you know that inflation is at a ten-year high and that it is critical to deploy cryptocurrency to hedge against creeping inflation and create high-yield passive income. But which company should you trust with your digital assets such as Bitcoin and USDT? There are all kinds of cryptocurrency wealth management and saving platforms in the market to help you deposit your cryptocurrency, so how can you find the right one for you?


There are many areas you should look at, but one of the most important areas I believe is that an investor should only use a cryptocurrency savings platform that is secure, reliable, reputable, and compliant. Let’s look at this in more detail below: 


Are their assets insured? 

While earning 5-8% a year on your cryptocurrency may sound great, you should know what will happen to your assets if the worst possible outcome occurred - a hacking resulting in loss of funds. Many platforms out there are not insured, so if something happens to your funds, it may be difficult, and sometimes impossible, for the cryptocurrency savings platform to recover your digital assets. 


There are countless times where cryptocurrency companies have been hacked that have made headlines across newspapers, so make sure that the company that you are evaluating has some kind of insurance in case something goes wrong. I am a supporter of FireBlocks software and APIs to custody, manage treasury and insure digital assets. If a cryptocurrency savings platform is using FireBlocks software, you can be rest assured that you are in good hands. 


Look for hidden fees

Always look for hidden fees as they are almost always there if you look hard enough. If you have a traditional savings account with a bank, you can withdraw all your money and close your account whenever you please - typically with no fees. But this isn’t the case with many cryptocurrency savings accounts. 


For example, some cryptocurrency savings accents have withdrawal limits that cap the amount you can take from your account over a period of time. These withdrawal limits can put your money out of reach when you may need it desperately, such as during an emergency or being laid-off from work. 


In addition, many cryptocurrency savings platforms make their customers pay fees when they withdraw their money. These fees can add up quickly if you are an active investor who makes a lot of transfers and transactions each day. So always read the fine print when you are seeking a place to deposit your cryptocurrency.  


Be wary of native platform tokens

Watch out if you are pushed to lock in a platform’s native token for a long period of time. Some of these cryptocurrency savings platforms want you to buy and stake their tokens, putting you at market risk when these platform token’s value tanks. Some of these cryptocurrency native platform tokens are down over 30% with no way of getting out without breaking the smart contract, which will incur heavy fees. 


Is the team experienced and trustworthy?

Similar to when you plan to invest in any business, when you look at placing your digital assets with a cryptocurrency savings platform, always evaluate the leadership.


Ask questions such as the ones below, just to list a few:

  • Do they have the right management to ensure that the cryptocurrency savings platform succeeds? 

  • Do they have a strong track record of people doing good work for society? 

  • Do they have the right skills and talents to ensure that they follow the law, earn income on my assets and keep the project running?

  • Is this project growing or dying? 

  • How seriously do they take compliance? Do they have a head of compliance running KYC and AML for its customers? 


Are they compliant?

European regulators are taking regulation for the cryptocurrency industry more seriously than ever before. Right now they are open to having the industry grow in the region, but they want cryptocurrency firms to follow the law of their land, or there are severe consequences to pay.

To be able to legally take in euro deposits, a cryptocurrency savings platform must be able to prove that it is secure, reliable, reputable and compliant. In fact, a major cryptocurrency wealth management and savings platform had to “temporarily suspend” the European Union’s Single Euro Payments Area (SEPA) network because of increased scrutiny from European regulators. SEPA allows customers to make cashless euro payments – via debit transfer and direct debit – to anywhere in the European Union, as well as a number of non-EU countries, in a quick, safe and efficient way, just like national payments.

You have worked hard to acquire your Bitcoin, Etherium, and stablecoins. Don’t throw them away on a cryptocurrency savings platform that isn’t at least helping you earn 10-12% a year on your USDT. Also, I would advise anyone to not risk their digital assets using platforms that are not secure, that don’t have your assets insured, and that don’t have experienced management teams. It is simply too risky. 

A word to the wise; only go with a cryptocurrency savings platform that is secure, reliable, reputable, and compliant.


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This post is from a series of posts in the group:

SEPA and European Payments

The Single Euro Payments Area, the Payments Services Directive, the Eurosystem, TARGET2, STEP2, the Euro and related matters.

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