- Finoa was approved by the German financial regulator BaFin earlier this year.
- Finoa will offer FinoaConnect to its 300-plus institutional clients.
- The FinoaConnect is a wallet integration with a curated list of permissioned DeFi platforms, web3 applications and blockchain governance scenarios.
Finoa, a cryptocurrency custody firm based in Berlin, is expanding its suite of services to offer its institutional clients easy access to a compliant form of decentralized finance (DeFi) through its custodial wallet infrastructure.
Earlier this year, Finoa secured regulatory approval from the German financial regulator BaFin, paving the way for this innovative move. The new offering, called FinoaConnect, integrates with a carefully curated list of permissioned DeFi platforms, web3 applications, and blockchain governance scenarios, serving over 300 institutional clients.
Wallet integration with permissioned DeFi platforms
Traditional financial institutions can now participate in DeFi lending pools and automated market making, but there is a critical requirement: they must have transparency regarding their trading counterparts. Consequently, this has led to the emergence of a more regulated subset of DeFi, characterized by enhanced anti-money laundering (AML) measures, such as integrated digital identity verification and the whitelisting of lending partners.
Finoa’s founder, Henrik Gebbing, noted a significant uptick in demand for enabling decentralized applications within Web3 environments through their custodial wallets. After evaluating various off-the-shelf wallet solutions, Gebbing concluded that they did not meet the stringent security and transaction integrity standards upheld by Finoa’s custodial wallet infrastructure, which had been meticulously developed over the past five years. Consequently, the decision was made to build FinoaConnect on top of their existing proprietary technology.
One key differentiator of FinoaConnect is its regulatory compliance. Gebbing emphasized that they do not simply connect Finoa wallets to any available decentralized application in the permissionless DeFi space. Instead, they offer a meticulously filtered and curated selection of decentralized applications (dApps) that clients can engage with.
While Finoa has not publicly disclosed the specifics of its curated list of web3 platforms, examples of DeFi offerings that align with institutional requirements include Aave Arc, Compound Treasury, and platforms like Maple Finance. These choices cater to the needs of regulated institutions seeking a secure and compliant entry point into the rapidly evolving DeFi ecosystem.