The journey of Relai
When Relai rolled out its tagline “easy crypto investing,” it was met with swift criticism from Bitcoin advocates. They urged Liniger and his team to concentrate exclusively on Bitcoin and enhance the app’s user-friendliness, integrating emerging Bitcoin technologies like the Lightning Network. Taking this counsel seriously, Liniger opted to transform Relai into a Bitcoin-exclusive application, a decision that resonated with his belief that Bitcoin is the singular genuine savings technology, similar to digital gold. He acknowledged that other cryptocurrency assets lacked the same long-term value as Bitcoin, particularly for a savings-oriented app like Relai.
After returning to Switzerland in 2018, Liniger made a daring choice that would determine his path forward. He declined a well-paying consulting position in conventional finance and instead chose to immerse himself in the cryptocurrency field by establishing Bravis, a crypto consulting enterprise. Through Bravis, Liniger guided banks through the intricate landscape of Bitcoin services, aiding them in strategically entering this nascent market. He was instrumental in creating products such as Bitcoin custody and trading, which were revolutionary at that time but have since become standard offerings among Swiss banks.
Though the addition of KYC might be viewed as a drawback by some within the Bitcoin community, Liniger remains focused on the overarching vision. He believes that the sustained success of Relai hinges on its capability to navigate these regulatory obstacles while continuing to deliver valuable services to its users. By adhering to compliance, Relai can persist and grow, ultimately introducing Bitcoin to more individuals throughout Europe.
Despite these hurdles, Liniger maintains a pragmatic outlook on the circumstances. He recognizes that opposing regulators in court, as some larger entities like Coinbase and Kraken have undertaken, is not a feasible path for Relai. These corporations have substantial financial reserves to engage in protracted legal confrontations, but Relai lacks the means to pursue such a battle. Instead, Liniger and his team have opted for compliance with the regulations, even if it necessitates some compromises during the process.
One of the most formidable aspects of this compliance journey has been the escalating demands from regulators. Liniger recounted how the regulatory environment has become far more invasive—not just for startups like Relai, but even for established financial institutions. He shared an anecdote from Relai’s CFO, who had formerly worked at ING, a prominent bank. When this CFO initially entered ING’s risk management compliance division, the team was relatively small, comprising just three or four individuals. Yet, within four to five years, that team had expanded ten times, illustrating the intensifying burden of regulatory compliance.
By 2019, Liniger’s entrepreneurial drive was urging him to expand his horizons. He aspired to build something more significant than a consultancy—something that would leave a lasting mark on the Bitcoin ecosystem. This aspiration aligned with his personal transition to a Bitcoin-only investment philosophy. He recognized a void in the market—there was no application in Switzerland or the broader European market that permitted users to purchase, non-custodially hold, and utilize Bitcoin seamlessly. This insight gave rise to Relai.
The expense of compliance
In 2019, Liniger, alongside his future co-founder Adem Bilican, took part in a hackathon where they unveiled their vision for Relai. Their proposal reached the finals, and by 2020, they had developed a prototype and received backing from two angel investors. That summer, the Relai app launched with the initial aim of offering access to Bitcoin and various crypto assets. However, the Bitcoin community had different desires.
As Relai broadened its influence across Europe, the firm swiftly confronted the intricate and often vexing realm of regulatory compliance. For a startup in the Bitcoin sector, maneuvering through these regulatory challenges is no trivial task, particularly as the guidelines are perpetually shifting and growing more restrictive. Liniger and his team had to commit substantial resources to ensure that Relai adheres to the diverse regulations imposed by both Swiss and EU authorities.
Source: bitcoinmagazine.com
One such compromise involved the implementation of Know Your Customer (KYC) policies for all users of Relai. For its first four years, Relai could offer its services without requiring users to submit personal details. However, as regulatory pressure from EU and Swiss authorities grew, Relai had to introduce KYC protocols. Liniger recognized that this was a challenging decision, yet it was essential to ensure the company remained compliant with legal standards.
For Relai, this regulatory pressure has necessitated that a considerable share of their resources be directed toward compliance-related tasks. Liniger noted that some industry counterparts allocate up to a third of their workforce specifically to regulatory compliance, which poses a considerable challenge for any company, let alone a startup with finite resources. Adhering to these regulations is not merely a legal obligation; it’s also a strategic choice to ensure the company’s long-term sustainability in a highly regulated environment.
Julian Liniger’s foray into Bitcoin and cryptocurrency initiated in 2015, when digital currency was still relatively obscure. Like many enthusiasts in the crypto realm, Liniger became instantly intrigued by the possibilities presented by this innovative technology. His intrigue intensified while observing Bitcoin’s remarkable ascent from ,000 to ,000, and he was actively engaged during the Ethereum ICO boom in 2017. At that moment, Liniger was studying in San Francisco on an exchange semester whilst pursuing his MBA, deeply engaging with the dynamic crypto development community that was burgeoning in the area.
By 2020, the Bitcoin-only movement was gaining traction, with Bitcoin-exclusive venture capital firms and businesses emerging globally. Liniger identified a chance for Relai to become a frontrunner in this field, especially in Europe, where the market was still considerably underexplored. With this aspiration, Relai embarked on a mission to democratize Bitcoin access, starting in Switzerland and expanding throughout the continent.
