Xapo Moves to Switzerland Citing Customer Privacy Concerns
Xapo has officially relocated its corporate headquarters to Zurich, Switzerland, citing the country's long history of neutrality and stability.
The bitcoin services and security firm said the transition was put in motion three months ago at the request of customers, and that now, Xapo's operations in Palo Alto are in the process of being reduced. As part of the transition, Xapo will hire new finance and legal staff in the central European nation while still keeping a small US presence.
In interview, Xapo CEO Wences Casares sought to position the move as one that would appeal to customers who remain worried about oversight of their bitcoin holdings and transactions.
Xapo indicated that its company representatives would now face potential fines and prison time for revealing customer information without consent in all but select circumstances.
Casares told CoinDesk:
"This is not to facilitate crime, this is to protect privacy. There are some customers that will bring more balances if we do this and there are some customers who have said we will work with you if you do this."
Casares said that previous attempts by the company to associate with Switzerland were perhaps not enough to encourage these customers. Xapo moved its deep cold storage vault servers to an unspecified location in the European nation in January, but continued to face pressure from customers for more privacy guarantees, Casares said.
"We decided to do what they had been asking us to do for a while, move our main company to Switzerland and benefit from the safeguards," Casares explained.
Commitment to security
While Casares suggested that Xapo was primarily interested in promoting user privacy, he noted that the company must still follow Swiss law. This includes monitoring transactions for potential money laundering, illegal transactions and terrorist financing.
"If we cannot prove who you are, we won't open an account for you, and if you do anything that looks suspicious, we will report you," Casares said.
Still, Casares indicated that Xapo's customers are most often using its accounts primarily for storage and security. He noted that many of its clientele have "never made a bitcoin payment", meaning its holdings are primarily long-term bets of high net-worth customers and family offices.
"Ninety-six percent of the coins that we hold in custody are in the hands of people who are keeping those coins as an investment," Casares continued.
The move to Switzerland will not coincide with any significant technical upgrades to Xapo's vault storage offering, which would still utilize security practices such as multisig and offline private key generation.
Piggy bank image via Shutterstock
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