German Billionaire Michael Gastauer Sets Sights on Acquiring California Bank

One of Germany’s top ten richest individuals, billionaire and fintech leader Michael Gastauer, is eyeing up the purchase of an FDIC member bank in the state of California. The entrepreneur has produced a handful of successful businesses, as well as decades of financial education under his belt.

His latest company, digital bank Black Banx, was launched in 2015 to critical acclaim. Since then, the Toronto-based bank has acquired over 28 million customers in 180 countries, making it one of the world’s most successful digital banks to date. Now, with his sights set on California, Gastauer has big hopes for Black Banx expanding into the United States.

Providing digital banking services to individuals, businesses and institutions in four continents, Black Banx’s customers stretch worldwide following the Group’s intention of making banking accessible for all. With 2.4 million business clients, Black Banx has reported a 16% increase in small-medium enterprise customers since December 2022. Black Banx’s increase in business clients provides a positive growth indicator towards expansion into new markets.

Stepping into the financial world in his early twenties through employment at Deutsche Bank, Gastauer created his first company a few years later. The selling of his first venture gave Gastauer the opportunity to move onto his second business, an online payment system for eCommerce sites, as one of the first in Europe.

In May 2015, following the successful launch of the neobank, Black Banx Group unveiled its first office in Palo Alto, California. Initially, Gastauer aimed to connect with the fast-growing fintech community in the area by spending a few months in the region to build the local network. Gastauer hired top executives from the San Francisco crypto and fintech community.

Gastauer expanded his relations and connected with notable figures from banks including CitiBank, WellsFargo and JPMorgan Chase, allowing Black Banx to offer customers payment in USD. A partnership was also formed with Palo Alto-based XAPO, a crypto storage and exchange company that enabled Black Banx to provide BTC- and ETH-based deposits and payment services with instant conversion into fiat currency.

In early 2017, Black Banx saw a shift in market needs and moved its offices from Palo Alto to San Francisco and relocated its executive team to New York City, aligning closer to other banking providers.

By October 2018, Gastauer found himself in difficult waters when the SEC filed a case against one of Black Banx’s clients. Roger Knox had been using the platform to wire hundreds of millions of dollars, proceeds that had been used in relation to the illegal sale of stocks on the US market. Gastauer, due to his role as CEO and Founder of Black Banx, was sued and brought into the trial for aiding and abetting Knox’s activities. The SEC fined Gastauer $165 million, an amount that caused Black Banx operations to be paused in the U.S. and specifically throughout California. In March 2022, the SEC’s civil litigation case ended with a reduced $17 million judgment in fines and disgorgement for Gastauer and his U.S. entities.

Following the upheaval of the SEC’s ruling, the Black Banx Group is planning to relaunch its services in the U.S. To enter the regional market, Gastauer has plans to purchase a federally licensed FDIC member bank in California that would make way for a nationwide rollout of Black Banx products and services. Gastauer has not disclosed the name of the U.S. bank he intends to buy, but he was able to confirm that the Black Banx Group is in talks with two potential candidates.

Commenting on the expansion, Gastauer said: “With over 39 million living in California, we [Black Banx Group] believe that California is the ideal starting point for our US product launch. Having started Black Banx in Palo Alto more than eight years ago, is another good reason to come back to California and start providing our services to the United States from the West Coast.”

Black Banx provides a wide range of services and with the prospect of expanding back into California, locals are expected to take advantage of the Toronto-headquartered institution and its offerings. The digital bank is highlighted as safe, fast and global with the company appropriately licensed and certified. Prospective customers can make an account within minutes providing they have access to the internet and a form of photo ID. Wealth and transactions can be managed within the Black Banx app.