The CEO of Zondacrypto attempted to launch a neobank in Latvia, investing €9 million, but the project collapsed as the crypto exchange faced liquidity issues and a police investigation.
Zondacrypto’s Neobank Venture
Przemysław Kral, the head of Zondacrypto, previously attempted to establish a neobank in Latvia, aiming to compete with companies like Revolut. He allocated €9 million from Zondacrypto funds to this endeavor.
On April 24th, the project failed when the application for a financial operating license was withdrawn, as reported by Money.pl.
Client Funds Lost at Zondacrypto
Customers of Zondacrypto lost access to hundreds of millions held in their exchange accounts. Starting in April, the company halted withdrawals, initially citing technical problems.
Money.pl journalists revealed that Zondacrypto was experiencing a severe liquidity crisis, with its cryptocurrency reserves shrinking by 99%. A police investigation into Zonda was launched on April 17th.
Seeking Loans on Favorable Terms
Weeks prior, while investigating Zondacrypto, Money.pl reporters were contacted by a businessman approached by individuals acting on behalf of Przemysław Kral. They requested a loan.
The offered repayment terms were significantly better than market rates.
The BeOne Project
For 2.5 years, Kral planned to launch BeOne in Latvia, a competitor to Revolut, offering features like accounts, cards, currency exchange, and mobile transfers.
This type of fintech, providing banking services without traditional deposit licenses, was to operate under the BeOne brand.
Project Suspension and License Withdrawal
The project was halted on April 24th, according to Money.pl. BeOne Europe SIA, based in Riga, withdrew its application for an electronic money institution (EMI) license.
“The company submitted an application for a license, but withdrew it today. Consequently, the license was not issued,” confirmed Jānis Silakalns, a spokesperson for the Bank of Latvia, which oversees financial licensing.
Funding from Zondacrypto
Funding for the BeOne project came from the Zondacrypto exchange, specifically through its Estonian subsidiary, BB Trade Estonia OÜ.
Funds were channeled through another Kral-affiliated entity, ZND Ventures OÜ, established for investing in technological projects like BeOne.
. **Sources:** Money.pl