Anchored Coins AEUR
Anchored Coins AEUR (AEUR) is a fiat-collateralized stablecoin pegged 1:1 to the Euro (EUR), issued by the Swiss-based company Anchored Coins AG. Launched in late 2023, AEUR was designed to serve as a secure and compliant digital representation of the Euro on the Ethereum and BNB Chain blockchains. [1] The project's operational history was defined by its adherence to Swiss financial regulations, its navigation of a significant counterparty crisis involving its initial banking partner, and its eventual decision to cease new issuance in response to the European Union's Markets in Crypto-Assets (MiCAR) regulation. [2]
Overview
Anchored Coins AEUR was introduced to the digital asset market to provide a stable medium of exchange and store of value tied to the Euro, bridging traditional finance with the decentralized finance (DeFi) ecosystem. [3] The issuer, Anchored Coins AG, is a Swiss company registered in Zug and a member of the Verein zur Qualitätssicherung von Finanzdienstleistungen (VQF), a self-regulatory organization (SRO) recognized by the Swiss Financial Market Supervisory Authority (FINMA). This structure was intended to provide regulatory trust and legitimacy. [4] [5] Each AEUR token was fully backed by an equivalent amount of Euro currency held in reserve at a FINMA-licensed Swiss bank. [1]
A defining feature of AEUR's framework was a bank default guarantee, designed to protect token holders in the event of the issuer's bankruptcy. [6] The project faced a significant operational challenge in mid-2024 when its primary banking partner, FlowBank SA, entered bankruptcy proceedings. Anchored Coins AG successfully managed this crisis by transferring its reserves to Swissquote Bank SA, ensuring the stablecoin remained fully collateralized. [2]
Subsequently, due to the implementation of the EU's MiCAR regulation, which requires issuers of Euro-denominated stablecoins to be licensed within the European Union, Anchored Coins AG announced it would cease issuing new AEUR tokens. As a Swiss-based entity, it did not meet this requirement, leading to a planned, orderly withdrawal from the stablecoin market. This series of events positioned AEUR as a case study in the operational and regulatory challenges faced by centralized stablecoins. [5] [2]
History
Anchored Coins AG, the issuer of AEUR, was founded in Zug, Switzerland, in 2022, initially operating under the name Damoon Technologies. In early 2023, the company became a member of the VQF, a FINMA-recognized SRO, formalizing its compliance with Swiss anti-money laundering laws. [3]
The Anchored Coins AEUR stablecoin officially launched on December 4, 2023, and began trading on various cryptocurrency exchanges. [5] Shortly after its launch, upon being listed on the Binance exchange on December 5, 2023, the token experienced a significant but brief price anomaly. Due to low initial liquidity paired with high demand, its price surged to over $2.00, a substantial deviation from its €1.00 peg, before stabilizing. [4] [7]
In June 2024, AEUR faced its most significant operational crisis. On June 13, 2024, FINMA initiated bankruptcy proceedings against FlowBank SA, the Swiss bank that held the Euro reserves for AEUR. [2] [5] In response, Anchored Coins AG temporarily suspended the issuance of new AEUR, the onboarding of new clients, and all redemption processes as a precautionary measure, under restrictions placed by Swiss authorities. The company later announced it had successfully restructured its collateral by moving the entirety of its Euro reserves to Swissquote Bank SA. This action fully secured the circulating supply of AEUR and resolved the immediate counterparty risk from FlowBank's collapse. [2]
Following the resolution of the banking crisis, Anchored Coins AG announced a strategic shift in late 2024. Citing the enforcement of the EU's MiCAR regulation, the company stated it would cease issuing new AEUR and begin an "orderly withdrawal" from the stablecoin market. As a non-EU entity, Anchored Coins AG could not obtain the necessary license to issue a EUR-denominated stablecoin compliant with the new framework. The company stated it would focus on establishing a compliant solution for existing AEUR holders. [2] [5]
Backing, Reserves, and Transparency
AEUR's stability mechanism was designed around full fiat collateralization, transparent reporting, and a unique default guarantee. [6]
Reserve Model and Custodians
AEUR operated on a full-reserve model, where every token in circulation was designed to be backed 1:1 by an equivalent amount of Euro fiat currency. [3] Initially, these reserves were held exclusively at FlowBank SA, a FINMA-licensed Swiss bank. Following FlowBank's bankruptcy in June 2024, the reserves were transferred to another FINMA-licensed institution, Swissquote Bank SA, which served as the subsequent custodian for the token's backing. [2] [5]
Audits and Attestation
To ensure transparency, Anchored Coins AG engaged multiple independent firms for audits and attestations. The company's statutory auditor was Prescient Assurance LLC. [6] For reserve verification, the company committed to regular attestations; some sources note that PricewaterhouseCoopers (PwC) Switzerland was engaged to perform monthly attestations to verify that the EUR funds in the reserve account sufficiently collateralized the circulating supply of AEUR. [4]
The AEUR smart contracts underwent security audits by PeckShield and CertiK to identify and mitigate potential vulnerabilities. [3] [4]
Bank Default Guarantee
A distinctive feature of AEUR's structure was a bank default guarantee provided by its Swiss-regulated banking partners, which included FlowBank SA and Swissquote Bank SA. This mechanism was designed as an additional layer of security for token holders. The guarantee would be activated if bankruptcy proceedings were irrevocably opened against the issuer, Anchored Coins AG. In such an event, AEUR holders could file a claim directly with the guarantor banks to redeem their tokens for EUR. This process required beneficiaries to submit a "Payment Request" and supporting documentation within a 360-day window following the opening of bankruptcy proceedings. This setup aimed to mitigate counterparty risk associated with the issuer's potential insolvency. [6]
Technology and Tokenomics
AEUR was built on established blockchain technology, incorporating centralized controls for regulatory compliance and a dynamic supply mechanism based on user demand.
Blockchain Implementation
AEUR was issued natively on the Ethereum and BNB Chain (also known as BNB Smart Chain) networks, making it widely compatible with wallets, exchanges, and DeFi applications in these ecosystems. [1] It adhered to the ERC-20 token standard on Ethereum and the BEP-20 standard on BNB Chain. [6] The token used the same smart contract address across both EVM-compatible chains: 0xA40640458FBc27b6EefEdeA1E9C9E17d4ceE7a21. [7] [2]
Smart Contract Administrative Functions
The AEUR smart contract granted Anchored Coins AG several administrative powers necessary for managing operations and complying with legal obligations. These functions included:
- Minting: The ability to create new AEUR tokens upon the receipt of corresponding fiat deposits.
- Burning: The ability to destroy AEUR tokens upon redemption for fiat currency.
- Pause/Unpause: A function to temporarily halt all token transfers network-wide, intended for use in exceptional circumstances like a major security vulnerability or a court order.
- Freeze/Unfreeze: A function to block token transfers from a specific address, to be used only when compelled by a court, regulator, or other competent authority. [6] [3]
Supply Mechanism and Fees
The supply of AEUR was elastic, designed to expand and contract based on direct minting and redemption activity with the issuer. Initially, direct issuance was available primarily to corporate clients. Any token holder could request direct redemption from Anchored Coins AG, subject to a minimum amount, initially set at €250,000. [6] [5] All direct transactions required full compliance with Know Your Customer (KYC) and Anti-Money Laundering (AML) checks. [3]
Fees were charged for direct issuance and redemption services. For users acquiring AEUR on secondary markets, fees were determined by the respective exchanges and brokers. Standard blockchain transaction fees (gas) also applied for on-chain transfers. [6]
Regulation and Legal Framework
AEUR was structured to operate within the Swiss regulatory landscape, but its operations were ultimately impacted by broader European regulations.
Swiss Jurisdiction and Compliance
Anchored Coins AG is a Swiss stock corporation (Company ID: CHE - 434.703.403) domiciled in Zug. [5] [6] As a member of the VQF, it is subject to Swiss AML and Counter-Terrorist Financing (CTF) laws. [4] Under FINMA guidelines, AEUR was classified as a payment token, not an investment product. All terms and claims related to the token are governed by the substantive laws of Switzerland, with legal disputes subject to the ordinary courts in Zug. [6]
MiCAR Regulation Impact
The European Union's Markets in Crypto-Assets (MiCAR) regulation established a comprehensive framework for crypto assets, including a rule that issuers of e-money tokens denominated in an official EU currency, such as the Euro, must be licensed as a credit institution or an e-money institution within an EU member state. As a Swiss-based entity, Anchored Coins AG did not meet this requirement. This regulatory change was the stated reason for the company's decision to cease minting new AEUR and plan an orderly withdrawal from the market. [2] [5]
Prohibited Jurisdictions
The use of services from Anchored Coins AG was strictly prohibited for persons and entities from a wide range of jurisdictions. This list notably included the United States of America, Russia, Belarus, the Democratic People’s Republic of Korea (North Korea), Iran, and Syria, among others subject to sanctions or on the FATF high-risk list. [6] [3]
Issuer and Key People
AEUR was issued by Anchored Coins AG, a financial technology company based in Zug, Switzerland. The company was formerly known as Damoon Technologies. [3] The company identifies its founders as "experienced blockchain industry leaders" and "entrepreneurs with decades of combined experience in financial services," without naming specific individuals on its primary website. [5] [1] One report identifies the company as being led by Calvin Cheng, a Singaporean investor and former chairman of an ASX-listed company. [3]
Ecosystem and Use Cases
AEUR was intended for several functions within the digital asset ecosystem, leveraging the stability of the Euro with the efficiency of blockchain technology.
Use Cases and Partnerships
Primary use cases for AEUR included serving as a stable trading pair on cryptocurrency exchanges, hedging against the volatility of other digital assets, facilitating efficient cross-border payments, and integration into DeFi protocols for lending and borrowing. [1] [3]
Anchored Coins AG established a partnership with DCS Card Centre, a Singapore-based financial institution, which allowed AEUR to be used as a form of collateral for credit limits on DCS cards. In addition to AEUR, the company is also the issuer of ACHF, a stablecoin backed 1:1 by the Swiss Franc (CHF). [3]
Market Availability
AEUR was available for trading on a number of centralized exchanges (CEXs), including Binance, Tokocrypto, and NovaDAX, with the AEUR/USDT pair on Binance being its most active market. It was also available on decentralized exchanges (DEXs) like Uniswap. [1] [7]
