The founders of Lithuania-based “cryptocurrency bank” Bankera have acquired the Pacific Private Bank, operating in Vanuatu, from its owner, Lithuanian national, Vilius Kavaliauskas.
According to the report by Verslo Zinios newspaper, Vilius Kavaliauskas confirmed that Pacific Private Bank has been sold. The amount of the transaction is not disclosed.
The bank has been acquired by three founders of Bankera – Vytautas Karalevičius, Mantas Mockevičius and Justas Dobiliauskas.
Lithuanian Bankera, one of many copycats of the popular “cryptocurrency” Bitcoin, is trying to cash in on the wave of Bitcoin’s financial bubble (price of Bitcoin had been reaching record heights in 2017).
According to Bankera founders, their “initial coin offering” (ICO) has already attracted more than 80 million euro from “over 66,000 contributors.”
They also claim it is already the most successful in terms of the amount of funds raised from all ICO’s in Lithuania, small state in Eastern Europe.
As European financial expert explained to Vila Times, the acquisition of Vanuatu’s Pacific Private Bank allows Bankera, a small controversial startup with highly questionable future, to get an official banking license. According to the reports in Lithuanian media, previously Bankera did not have an official license from any country.
“Acquisition of the bank was due to the fact that we know well the team working there, we see great potential in the Australian and South Pacific regions, and the bank itself has a strong infrastructure, an innovative customer base and 20 year work experience. We are currently seeking to increase bank efficiency by using blockchain solutions for customer identification and interbank payments. We are also actively looking for talented finance and IT professionals who would like to take advantage of this unique opportunity and, at least for several years, to work in Vanuatu,” Vytautas Karalevičius, co-founder of the Lithuanian “cryptocurrency bank,” said.
According to Karalevičius, after the completion of this deal owners of Bankera plan to connect its users to the “blockchain network” of Ripple, another highly controversial “cryptocurrency” scheme.
Pacific Private Bank is a full-service bank that was founded in 1997 and registered in Vanuatu. According to the information on Pacific Private Bank’s web-site, the bank’s “focus is to provide services to wealthy, private clients from around the world.”
“With a specialization in wealth and asset management, our bank develops and offers tailored investment solutions. We accommodate to the individual objectives of every customer by providing personalized private inbanking services.”
It is reported that “cryptocurrency bank” Bankera was not able to obtain a Lithuanian banking license, as the Bank of Lithuania has publicly announced that financial market participants can not engage in any activities with so called “cryptocurrencies”. In addition, the Bank of Lithuania requires any financial institution to justify the origin of the money, but not all ICO providers may name specific investors in the ICO, as some tend to be anonymous.
Last time Vanuatu was mentioned in connection with “cryptocurrencies” in October last year, when a group of scammers behind the entity calling itself Vanuatu Information Centre attempted to run a scheme, claiming that applicants for Vanuatu’s DSP Citizenship Program will have the opportunity to make payments for the citizenship in Bitcoins. After this scheme had been exposed by local media (Vila Times and Daily Post), Vanuatu Government also awkwardly confirmed the announcement to be false and misleading.
Meanwhile, qualified financial experts around the world are saying that “cryptocurrencies” market is “a bursting bubble, and it has a long way to fall.”
For example, Howard Wang of New York-based Convoy Investments LLC and Jeremy Grantham of GMO LLC have analyzed Bitcoin’s advance relative to past frenzies and concluded that it’s unsustainable, Fortune reports. Grantham, who helps oversee about $74 billion as GMO’s chief investment strategist, summed up his concerns in a Jan. 3 letter to investors:
“Having no clear fundamental value and largely unregulated markets, coupled with a storyline conducive to delusions of grandeur, makes this more than anything we can find in the history books the very essence of a bubble,” he wrote.
As regulators in South Korea again signalled that they were considering a ban on cryptocurrency exchanges, Capital Economics firm also dismissed claims that bitcoin and its imitators could replace established currencies as “rubbish”.
Capital’s research note says the latest price falls “suggest that the bubble is bursting” although because the price was still ten times higher than it was a year ago, it still had a long way to fall.
Part of the problem, Capital says, is that despite the claims that cryptocurrencies could replace dollars one day, the surge in the price was not being driven by any strategic world view but more a simple belief that they will continue to rise in value.
“Most people are buying Bitcoin, not because of a belief in its future as a global currency, but because they expect it to rise in value,” the note says.
“Accordingly, it has all the hallmarks of a classic speculative bubble, which we expect to burst. Triggers for the bubble to burst could be a further crackdown by regulators or a major hacking attempt.
“When it will fully burst is anyone’s guess and prices could yet rise again, before they fall further ahead,” they added.