Safello acquires ICBIT and appoints founder as new CTO

Two of the oldest bitcoin services have merged, helping to grow a popular bitcoin buying and selling service into a wider exchange platform featuring margin trading. Swedish-based Safello announced the acquisition of BT Technology Inc.’s assets, including the ICBIT futures exchange platform.

As part of the acquisition, ICBIT’s founder and CEO Aleksey Bragin, is assuming the role of  Safello Chief Technology Officer. Bragin is also President of the ReactOS Foundation and a lecturer at the Moscow State Technical University. His first task will be overseeing the integration of his old technology into the new platform, and then further grow Safello's offering.

- Aleksey Bragin, ICBIT CEO & Founder

Having launching late in 2011, the Russian ICBIT was the very first bitcoin exchange to offer futures contracts. 12000 customers executed 11.6 million trades on the platform before it closed in March. The service let users trade anonymously, skipping the identification process required for AML/KYC requirements, which eventually led to it’s closure.

The exchange offered classic bitcoin trading for both dollars and rubles, and margin trading on a variety of futures products, such as BTC/USD, BTC/LTC, a unique Bitcoin Difficulty contract, and a classic S&P500 index. With no AML/KYC processing, there was no way to withdraw funds in dollars, or to US accounts. The company took a flat fee of 0.005 BTC per bitcoin from each contract.

ICBIT was widely cited in the mainstream press in 2013 as the only platform offering margin trading, including features on CNN, Yahoo Finance, Bloomberg, Wired, and Businessweek.

Although it was one of the only exchange platforms to survive that long without being hacked, it was often criticized for several reasons. Low liquidity was often an issue, and scams were were simplified by the anonymous nature of trades. However, there wasn’t a centralized hot wallet holding several users’ bitcoins, and the site was considered extremely secure for its time.

Newer margin-trading exchanges like Bitfinex, which launched in 2014, didn’t have the same liquidity problems and quickly overtook ICBIT. A rebranded ICBIT site, called Orderbook.net, was subsequently issued a cease and desist notice from CFTC at the beginning of March, and US citizens were no longer able to trade options there legally. The site had closed by May, having paid all account holders in full.

- Orderbook.net

Safello launched in July 2013, with the goal to bring user-friendly, AML/KYC compliant bitcoin buying and selling service in the European market. The Swedish company started with only US$30,000 from private investors, and was among the first services to allow people to buy and sell bitcoin quickly with euros, sterling, and kronor. The site claims to have tens of thousands of customers, having traded over 100 million bitcoins.

A seed funding round of $600,000 in February 2014 helped the startup expand, and it has become the most popular way to buy bitcoin in the Swedish and German markets. The startup was subsequently chosen by Barclay’s bank to attend the Spring 2015 Techstars accelerator.

Safello and Everledger were the only bitcoin and blockchain technology companies out of ten in that session. The thirteen-week networking, mentoring, and development program for startups was focused on fintech innovation breakthroughs.

In May 2015, Safello ran a successful crowdfunding campaign backed by Barry Silbert’s Digital Currency Group, raising €629,949 (US$685,770) from 152 investors. The funds were earmarked for further expansion across Europe, and the company has since purchased the ICBit assets.

- Frank Schuil, Founder & CEO Safello