Generation Start-up: How Hayvn plans to transform crypto investing

The Abu Dhabi-based virtual asset trading platform uses an investment bank approach to offer a 'safe haven' in the often volatile world of digital currencies

Hayvn chief executive Christopher Flinos says he did not have to reinvent the wheel when he founded the digital asset trading platform. Photo: Hayvn

Unlike many start-up founders, former investment banker Christopher Flinos wasn’t aiming to solve a problem when he started working on the concept for Hayvn, the Abu Dhabi Global Market-regulated virtual asset trading platform.

It was while working at Sterling Financial Services, a boutique investment bank he co-founded in Abu Dhabi with a former colleague from Merrill Lynch, that he spotted a major gap in cryptocurrency trading.

Or, as Mr Flinos, co-founder and chief executive of Hayvn, prefers to say, “We saw an opportunity the size of a bus”.

That was about six years ago, a time when there were few opportunities for retail investors to carry out large trades in cryptocurrencies on established platforms or through over-the-counter (OTC) trading desks.

“At the time, there was a ‘no man's land’ of WhatsApp groups and cash trades and things like that,” Mr Flinos, from Melbourne, Australia, says.

“I was trying to put some large trades on for a client and for myself, and I was watching how these transactions had to happen. All they were buying were Bitcoin and Ethereum but they were of significant size … so there wasn't anything available in the market.

“My view was that this can't continue. The technology is too good for this sort of trading to continue indefinitely, so the idea started with the trading desk.”

Mr Flinos and fellow founder Ahmed Ismail set up Hayvn in 2018 by adapting their “investment bank DNA” to create a platform that offered investors a regulated “safe haven” in the “anti-establishment”, often volatile world of cryptocurrencies, he says.

“Our business isn't built on the blockchain but all the products that we use are, so I think everybody quite likes that approach,” Mr Flinos says.

“And the best thing about it is, I don't need to reinvent the wheel; I just have to go about doing what I normally would have done if I was working at Merrill, but just be you.”

In recent years, the UAE has emerged as a global centre for virtual assets.

In March last year, Dubai adopted the Dubai Virtual Asset Regulation Law, which aims to create an advanced legal framework to protect investors and provide international standards for virtual asset industry governance that promotes responsible business growth in the emirate.

It also established the Virtual Asset Regulatory Authority (Vara) as an independent body to regulate the sector throughout the emirate, including special development zones and free zones, but excluding the Dubai International Financial Centre.

Last September, the Financial Services Regulatory Authority, the regulator of the ADGM, published guiding principles on its approach to virtual asset regulation and supervision to outline its expectations for the asset class and service providers in the sector.

Watch: What is Bitcoin and how did it start?

The principles complement ADGM’s regulatory framework for spot virtual asset activities, the financial regulator said at the time.

Hayvn is now regulated in three financial jurisdictions: Abu Dhabi, Australia and the Cayman Islands.

Its services have expanded from the original OTC cryptocurrency trading business to include digital asset custodial services, asset management and digital payments.

It also works with some UAE real estate developers, allowing people to buy property using cryptocurrency.

While Mr Flinos invested an undisclosed sum in Hayvn and did not earn a salary for more than three years, the company’s seed round raised funding of just under $1 million.

With the capital raise that we are going to be doing over the next couple of months, it is all designed around really going headfirst into that cryptocurrency payments ecosystem

Christopher Flinos,
co-founder and chief executive of Havyn

Hayvn is preparing for a series B funding round in the second half of this year and aims to raise up to $20 million, which it will use to further scale the business and potentially spin off Hayvn Pay.

“We are working through that at the moment and are hopeful that we will be able to spin off Hayvn Pay quite quickly, have it on its own and then potentially look at whether the series B is done at the Hayvn level, or whether it is done at the Hayvn Pay [level],” Mr Flinos says.

In November, Hayvn said it was considering a formal bid for the acquisition of collapsed cryptocurrency exchange FTX’s payments business, as it appeals as a “bolt-on” to the Hayvn Pay infrastructure.

“We are pleased to learn that some of the FTX business have solvent balance sheets, responsible management and valuable franchises,” Mr Flinos told The National at the time.

“We are open to a discussion with their bankers, Perella Weinberg, as soon as they have the court’s approval to proceed.”

FTX filed for bankruptcy protection in the US on November 11 in the highest-profile cryptocurrency exchange failure to date.

Sam Bankman-Fried, the disgraced co-founder and former chief executive of FTX, is currently under house arrest in the US after being charged with eight criminal counts for allegedly misusing billions of dollars in customer funds before the $9 billion collapse of the platform and Alameda Research.

Cryptocurrencies — in pictures

The crypto market, which includes currencies such as Bitcoin, pictured, has lost $2 trillion of its value in six months. Unsplash

The price of Ethereum, the second largest cryptocurrency by market size, has fallen by 70 per cent this year. Investors and analysts are watching to see if it will dip below $1,000. Unsplash

Dogecoin, supported by Elon Musk, is about 90 per cent down from May last year, yet it is outperforming Bitcoin and Ethereum in the current crash. Unsplash

The government of El Salvador has invested $105 million in Bitcoin. President Nayib Bukele's embrace of the cryptocurrency as legal tender is being questioned as the market crashes. Getty

Changpeng Zhao, founder of crypto exchange giant Binance, has compared the current market turmoil to the dotcom bubble of the early 2000s. Still, the company is aggressively pursuing licensing in international jurisdictions and introducing new products. Getty

Tether is the biggest issuer of stablecoins, a type of cryptocurrency pegged to a traditionally stable asset like the US dollar. Most stablecoins are meant to maintain a constant price of $1 and are backed by real reserve funds, making it easy to convert crypto investments into cash. But Tether's financial statements show that may not be true, leaving the issuer and its investors vulnerable. Unsplash

The recent crypto crash can in part be attributed to the collapse of TerraUSD, a stablecoin pegged to the US dollar through algorithms and linked to a "sister" cryptocurrency named Luna. When the price of Luna plummeted, TerraUSD also fell, creating a “death spiral” to practically zero for both coins. Unsplash

On June 12 crypto lender Celsius Network said it had paused customer withdrawals, saying it needed “to stabilise liquidity and operations”. Investors are still waiting, with no signs that the current meltdown will let up. Getty

The FTX Pay bid is still on the table and the company is waiting to receive the due diligence pack, Mr Flinos says.

“I am still positive on that and I am still hopeful that we will be able to do a transaction and win that business,” he says.

“With the capital raise that we are going to be doing over the next couple of months, it is all designed around really going headfirst into that cryptocurrency payments ecosystem.

“We are trying to compete against institutions and organisations in the payment space that have been there for 30, 40, 50 years, so we need some size and we need some scale.”

Q&A with Christopher Flinos, co-founder and chief executive of Hayvn

What other successful start-up do you wish you had started?

Since founding Hayvn five years ago, I have always had an eye out at other new businesses and great ideas that have been taken to market and learnt from their success and, sometimes, their failure. It has been incredible to see the boom in transformational business models that have come out of this, globally and regionally.

My personal favourite is Noon and seeing them roll out Noon, then Grocery, then Food and then the 15-minute business. All complementary and a wonderful business model of capturing a consumer and then never letting them leave your ecosystem.

Witnessing the success of this business model, of extending the customer life cycle, through value-adding services, is what drove me to build Hayvn into a fully regulated institutional cryptocurrency powerhouse.

Who is your role model?

My role model ever since I came to the Gulf has been Khaldoon Al Mubarak, managing director and group chief executive of Mubadala Investment Company. What he has achieved for the nation in so many roles, ranging from Mubadala through to Manchester City, is really impressive. I hope one day I get to meet him.

What new skills have you learnt since launching Hayvn?

I am very clear on the three biggest things that I have learnt since launching Hayvn. I have learnt how to lead. I have learnt how to bring people together around a common goal and how to execute. When you start a new business with seed capital, you can't just throw money at a situation; you must organically build the right team and the right partners. In the early days, they are really investing in you personally. Your integrity, honesty, vision and drive to get the business to a point where it is self-sustaining are all integral to succeeding.

Where do you want to be in five years?

In five years from now, I expect to have led Hayvn to become one of the world’s most trusted institutions for digital assets worldwide and a key player in the global payments industry. We will have successfully “IPO’d” the business, and be looking to merge Hayvn into an existing banking giant or acquiring a bank and rolling it into the Hayvn ecosystem.

If you could do it all differently, what would you change?

I spent the first nine months when Hayvn was in design stage listening to investor feedback and listening to my peers, my previous role models at Merrill. I listened to too many people instead of trusting myself and driving myself. I then stopped listening to the doubters and trusted my vision and went to work on executing Hayvn, and building it into the regulated, cryptocurrency-focused financial institution it is today.