Bitpanda Documents Reveal Insights into Crypto Platform’s Inner Workings
Bitpanda, a leading cryptocurrency platform based in Austria, has been under scrutiny following an investigation by WDR, NDR, and SZ. This inquiry revealed significant internal shortcomings within the company, which has grown significantly since its inception in 2014. With approximately seven million users, Bitpanda operates a subsidiary in Germany and holds licenses for cryptocurrency transactions in both Germany and Austria.
Compliance and Regulatory Challenges
Despite its image as a compliant company, internal documents suggest otherwise. Eric Demuth, Bitpanda’s founder, has frequently emphasized the company’s commitment to compliance. However, reports indicate that the German Federal Financial Supervisory Authority (BaFin) discovered serious deficiencies during a risk management audit in 2023.
Audit Findings
- BaFin identified 16 compliance issues, including:
- Five classified as “serious”
- Four deemed “significant”
- Six considered “moderate”
- One “minor” issue
The primary concerns were related to risk management, IT, and outsourcing practices. Nikolai Badenhoop, a legal expert at the Leibniz Institute for Financial Market Research, characterized these findings as grave, given the volatile nature of the cryptocurrency market.
Efforts to Address Issues
Bitpanda has reportedly committed to resolving these deficiencies by March 2025. In a follow-up letter from BaFin in January 2025, the authority noted that 68.8% of the issues had been addressed, but emphasized that Bitpanda still lacked a proper business organization as per regulations.
Internal Review and Further Challenges
Additionally, internal audits revealed a lack of necessary documentation and insufficient knowledge of regulatory requirements among staff. The IT department, crucial for a cryptocurrency platform, was not prepared for evaluation.
Bitpanda has responded in its 2024 report, stating that it has rectified all noted issues and fulfilled BaFin’s requirements. The company insisted that the audit was routine and part of a broader commitment to being a fully regulated financial entity.
The Path Ahead
As Bitpanda prepares for a potential Initial Public Offering (IPO) in Frankfurt in 2026, aiming for a valuation between four to five billion euros, the company must navigate its compliance landscape carefully. Although it maintains a leading status in the European cryptocurrency market, the scrutiny from regulators underscores the challenges faced by platforms in the rapidly evolving crypto industry.
Unlike many competitors operating without European licenses, Bitpanda’s adherence to regulatory requirements provides a framework for consumer protection. This focus on regulatory compliance positions Bitpanda as a potentially healthier option in a market often marred by volatility and scandal.
