Company Name: Relai

Founders: Julian Liniger and Adam Bilican

Date Founded: July 2020

Location of Headquarters: Zurich, Switzerland

Amount of Bitcoin Held in Treasury: One-third of Relai’s treasury

Number of Employees: 30

Website: https://relai.app/

Public or Private? Private

Julian Liniger is on a mission to give more Europeans exposure to Bitcoin — despite regulatory bodies making it more difficult for Bitcoin businesses like the company he co-founded, Relai, to operate on the continent.

Liniger, a clean-cut Swiss entrepreneur who was one of Forbes’ 30 Under 30 in 2022, believes that there is much work to be done in bringing bitcoin to Europeans, even if new regulatory regimes like Markets in Crypto-Assets Regulation (MiCA) create more red tape around serving EU and UK citizens.

“We are working to make Bitcoin more accessible, easier to use and easier to buy for normal people,” Liniger told Bitcoin Magazine.

“We’re mainly targeting newcomers — the 90% of the people that don’t have easy access to bitcoin yet or that just haven’t tried yet because they were also not educated yet. In Europe, around 8% to 10% of people have bitcoin and 90% still don’t,” he added.

To reach this 90%, Liniger and the team at Relai have had to obtain the proper licenses and follow certain regulatory procedures, like requiring that customers complete Know Your Customer (KYC) procedures in order to use the app. Keeping Relai compliant is a tedious process, but Liniger, Libertarian-minded yet pragmatic, sees it as a necessary evil.

“I try to build the best company and onboard as many people as possible to Bitcoin in the most Bitcoiner way possible, which is certainly self-custodial and Bitcoin only, but we also need to stay in the realm of what is legal,” Liniger explained.

“So, we adhere to these regulations, whether I as an individual like it or not. As a business person, I need to make these decisions,” he added.

Wise words from someone who’s no stranger to taking the hard road.

The Road To Relai

Liniger was first introduced to bitcoin and cryptocurrency in 2015 and quickly went down the broader crypto rabbit hole.

In his early 20s, he watched bitcoin’s price skyrocket from $1,000 to $20,000 and experienced the Ethereum ICO boom from up close as he spent a portion of 2017 in San Francisco, then a hotbed for crypto developer activity, on an exchange semester while pursuing his master’s degree in business administration (MBA).

Upon returning home to Switzerland in 2018, he turned down a well-paid consulting job in the world of traditional finance and instead founded Bravis, a crypto consulting firm. During this time, he helped banks prepare to offer Bitcoin services.

“[We] helped them to position strategically in this new world and also to conceptualize some products, like actually starting to offer Bitcoin custody, trading, etc., which was inconceivable back then,” said Liniger. “Now, a lot of Swiss banks are doing it.”

By 2019, Liniger’s entrepreneurial drive had kicked into a new gear. He wanted to build something bigger than a consulting firm. This urge coincided with his personally adopting a bitcoin-not-crypto investment thesis and realizing that no app in the Swiss or broader European market allowed users to buy, non-custodially hold, and use bitcoin (all of which Relai does).

That same year, Liniger and his soon-to-be co-founder at Relai, Adam Bilicon, participated in a hackathon and made it into the finals with their concept for the company. By 2020, the two had built a prototype and had raised money from two angel investors. By summer of that year, the Relai app went live with the intention of first providing access to bitcoin and then offering other crypto assets.

The Bitcoin community didn’t like the latter notion, though.

Bitcoin Only

Liniger recalled introducing Relai’s promo phrase “easy crypto investing” and the instant backlash it drew from Bitcoiners.

“They were like ‘Why crypto? Just stick to Bitcoin and make it really great,’” said Liniger, adding that Relai’s users urged him and his partner to simply make the app as easy-to-use as possible and to incorporate then-new Bitcoin technology like Lightning, both of which Relai have done.

Liniger, who’d first conceptualized Relai as a Bitcoin-first crypto app, made the decision to make it a Bitcoin-only app.

“[I thought] it wouldn’t hurt to also have a couple other [cryptos],” recalled Liniger.

“But then I realized it actually would hurt. All the other [cryptos] don’t make sense in the long run if you want to be a savings app. Bitcoin is a savings technology; it’s digital gold,” he added, noting that other crypto assets neither purport to be or act as a store of value.

Liniger also noted that by 2020, both Bitcoin-only venture capital firms and more Bitcoin-only companies were beginning to arise, and he felt that Relai could be a part of this trend.

“We had River in the US, Bull Bitcoin in Canada, etc, and we were thinking we could be the leader of this category in Europe,” said Liniger.

Developing A European User Base

Based in Switzerland, Liniger and the Relai team had a leg up on the rest of Europe, as regulations in Switzerland are a bit more relaxed than those in the European Union. Liniger, however, did not want to just serve Swiss citizens for two reasons.

The first is that the percentage of Swiss citizens that own bitcoin is closer to 20%, according to Liniger, as compared to the 10% or so of Europeans from other countries. There’s less of a market for those who are new to Bitcoin to go after in Switzerland as compared to those living in the EU and UK.

The second reason is that Switzerland’s population is about 8.7 million, whereas the total population of the EU plus UK is over 500 million.

In the past four years, Relai has acquired 120,000 users across the continent and Liniger says the growth curve is accelerating even as the company faces certain regulatory impediments.

“We are not currently allowed to actively acquire users in the EU for regulatory reasons,” explained Liniger. “We can do active marketing tactics in Switzerland, but not in all the EU countries.”

Even in the absence of marketing, Relai continues to grow its user base, especially in Germany, Italy and France.

The number of Relai users in these countries will likely continue to grow rapidly as the company is in the process of obtaining licensing from France that will allow the company to advertise to EU customers.

“Probably by the end of this year, we will get the French license approval,” said Liniger. “Then, at the beginning of next year, there’s going to be MiCA and this [French license] is going to transition into a MiCA license, which will then allow us to actively acquire customers in all the EU.”

Once this happens, Liniger believes that upwards of 90% of bitcoin purchases in the EU and UK will happen via Relai.

The Cost Of Compliance

While Liniger, notably calm and level-headed, talks about the process of overcoming regulatory hurdles, one can’t help but imagine how frustrating the process has been for him and his team.

He stated that regulatory bodies and requirements have become significantly more intrusive for not only startups like Relai, but established financial institutions, as well.

“I heard stories from our CFO who used to work at ING, a huge bank, four or five years ago,” shared Liniger. “He was in one of these risk management compliance departments, which, when he joined, was like three or four people and the team has 10x’d in the four or five years since.”

Liniger went on to explain that many of Relai’s peers have up to a third of their team focused on regulatory compliance.

While he’s hopeful that the likes of Coinbase and Kraken fighting the US Securities and Exchange Commission (SEC) in court will set some sort of precedent that will get regulators to back off, he doesn’t see the trend of regulatory overreach reversing just yet, which seems slightly worrisome to him.

“We don’t have these resources at all,” said Liniger, comparing Relai’s funds to the type of money that Coinbase and Kraken have in their coffers to fight regulators in court.

This is part of the reason Relai didn’t fight back in court when regulators told them they had to KYC all of their customers.

KYC Required, But Do Not Despair

Relai recently announced that all users would have to provide their personal information by October 31, 2024 to continue using the app, after four years of being able to offer services without requiring users to do so.

“We were just basically forced to by the EU regulators and, increasingly, also from the Swiss regulators,” said Liniger in regard to having to make customers complete the KYC process. “The EU is pressuring Switzerland.”

While Liniger didn’t sound particularly happy about this, he also didn’t sound defeated. Instead, he seemed as focused as ever on his mission to bring bitcoin to the 90% of EU and UK citizens who still don’t have any.

“50% plus of the people will want some access to Bitcoin just because it’s a savings technology,” explained Liniger, which means he still has about 200 million customers (a 170x of Relai’s current users base) to reach in the broader jurisdiction Relai serves.

Admittedly, he knows some of these potential customers will opt to buy bitcoin or bitcoin ETFs that major financial institutions custody for them instead of using Relai, though he believes that the youth, who are more distrusting of established financial institutions, will opt to use Relai.

“The more progressive younger people will want to take custody themselves,” explained Liniger. “They will use something like Relai where they can buy directly into self custody and set up a savings plan, using it as a sovereign way of saving their money and their purchasing power into the future.”