Swapped: Crypto Payment Processor Investor & Compliance Briefing

Charlene Lensburg
Tue, 23 Sep 2025 12:28:44 +0000
Crypto Compliance, Crypto Payment Processor Watch, Illegal gambling, Illegal Payment Services, ticker, Bitinvestor, Jonathan Bau, Kado Software, Swapped, Swapped.com, Thomas Franklin

Swapped represents a concerning case study in the crypto payment processing sector, highlighting the challenges of compliance in an evolving digital asset landscape. While the Denmark-based company has achieved notable growth, recent investigations reveal significant compliance failures that pose substantial regulatory and reputational risks to the organization and its stakeholders.

Executive Summary

Swapped.com represents a concerning case study in the crypto payment processing sector, highlighting the challenges of regulatory compliance in an evolving digital asset landscape. While the Denmark-based company has achieved notable growth with 1.5 million users across 150+ countries, recent investigations reveal significant compliance failures that pose substantial regulatory and reputational risks to the organization and its stakeholders.

Key Investment Concerns: FinTelegram’s comprehensive investigation has uncovered deep operational ties with unlicensed gambling platforms, particularly Gamdom, despite explicit regulatory prohibitions. These relationships expose Swapped to multi-jurisdictional enforcement actions and contradict the company’s stated compliance framework.

Read our reports on Gamdom here.

Company Overview

Corporate Structure and Leadership

Swapped ApS, incorporated in Denmark under registration number 42865397, operates from dual headquarters in Aarhus, Denmark and St. Julians, Malta. The company was founded in 2021 by Thomas Franklin (CEO) and Jonathan Bau (CTO/CMO), who previously operated under the name Bitinvestor before rebranding.

Thomas Franklin brings compliance expertise from his previous role as Money Laundering Reporting Officer, while Jonathan Bau contributes technical leadership with full-stack development and cybersecurity experience in cryptocurrency applications since 2017. The company successfully acquired US-based Kado Software in April 2025 to expand its North American operations.

Business Model and Market Position

Swapped operates as a cryptocurrency on-ramp/off-ramp payment processor, facilitating conversions between traditional fiat currencies and digital assets. The platform supports over 30 cryptocurrencies and 25+ fiat currencies through 40+ payment methods, targeting both retail consumers and merchant integration services.

Market Context: The global crypto payment gateway market is experiencing rapid expansion, valued at $1.68 billion in 2025 and projected to reach $6.03 billion by 2035 at a 13.6% CAGR. However, the sector faces increasing regulatory scrutiny, particularly in the EU under the new MiCAR framework.

Key Business Metrics

Metric | Value
Company Name | Swapped.com
Founded | 2021
Headquarters | Aarhus C, Denmark / St. Julians, Malta
Legal Entity | Swapped ApS
Registration Number | 42865397
CEO/Co-Founder | Thomas Franklin
CTO/Co-Founder | Jonathan Bau
Total Users | 1.5+ Million
Countries Supported | 150+
Payment Methods | 40+
Cryptocurrencies Supported | 30+
Fiat Currencies | 25+
Employees | 11-50
Funding Stage | Series A
Regulatory Status – Denmark | DFSA Registered CASP under MiCAR
Regulatory Status – Canada | FINTRAC Registered MSB
Regulatory Status – Australia | ASIC Registered
Key Acquisition – 2025 | Kado Software (April 2025)
Former Name | Bitinvestor
LEI Code | 894500H8YU01P0Q0ST42
Business Model | Crypto On-ramp/Off-ramp Payment Processor

The company’s growth trajectory shows strong user acquisition, reaching 1.5 million users since its 2021 launch. However, this growth has occurred alongside significant compliance deficiencies that threaten sustainable operations.

Regulatory Framework and Compliance Status

Current Regulatory Authorizations

Swapped maintains several regulatory registrations that position it within legitimate financial services frameworks:

Denmark: Registered as a Crypto-Asset Service Provider (CASP) under MiCAR with the Danish Financial Supervisory Authority (DFSA)

Canada: Registered Money Services Business (MSB) with FINTRAC

Australia: Registered with ASIC for operations through a branch entity

These registrations provide EU passporting rights under MiCAR, theoretically enabling compliant operations across European markets.

Critical Compliance Failures

Despite regulatory registrations, FinTelegram’s investigation reveals systemic compliance violations that undermine the company’s operational legitimacy:

Issue | Description | Impact
Gamdom Integration | Deep integration with unlicensed crypto casino | High
Illegal Gambling Facilitation | Enabling gambling in restricted EU jurisdictions | Critical
Spanish DGOJ Sanctions | Connected to €5M fine against Gamdom operator | High
German GlüStV 2021 Violations | Facilitating offshore gambling prohibited in Germany | High
UK/Italy Regulatory Violations | Supporting restricted gambling activities | High
Terms of Service Enforcement | Failure to enforce prohibited activities clauses | Medium
Merchant Monitoring | Inadequate merchant onboarding and monitoring | Medium
AML/KYC Compliance Gaps | Insufficient compliance culture and oversight | High

The most significant concern involves Swapped‘s deep integration with Gamdom, an unlicensed crypto casino operating from Curaçao. This relationship violates multiple regulatory frameworks:

Spanish DGOJ: Gamdom‘s operator Smein Hosting faces €5 million in fines for unlicensed activity

German GlüStV 2021: Facilitates prohibited offshore gambling targeting German residents

UK Gambling Commission: Enables unlicensed gambling activities in restricted markets

Risk Assessment and Regulatory Exposure

Multi-Jurisdictional Enforcement Risk

Swapped‘s compliance failures expose the company to enforcement actions across multiple jurisdictions. The integration with unlicensed gambling platforms creates liability under various regulatory frameworks:

AML/KYC Deficiencies: Despite claiming robust compliance procedures, the company’s merchant onboarding processes appear inadequate to prevent prohibited use cases. The Terms of Service explicitly prohibit unlawful gambling activities, yet enforcement mechanisms are demonstrably ineffective.

Regulatory Contradiction: The company’s DFSA registration under MiCAR requires strict compliance with EU anti-money laundering directives, yet operational evidence suggests systematic violations of these requirements.

Reputational and Operational Risks

The public exposure of compliance failures creates cascading risks:

Regulatory Action: Potential license revocation or suspension across multiple jurisdictions

Banking Relationships: Financial institutions may terminate services due to reputational concerns

Merchant Partners: Legitimate businesses may discontinue relationships to avoid compliance contamination

User Base: Reputation damage may accelerate user attrition in competitive markets

Market Position and Competitive Landscape

Industry Context

The crypto payment processing sector operates in an increasingly regulated environment. Market leaders maintain strict compliance standards to preserve regulatory relationships:

Fee Comparison: Traditional payment processors charge 2.5-3.5% transaction fees. Swapped’s competitive positioning relies on transparency and low fees, with spreads varying by payment method.

Regulatory Compliance: Legitimate players invest heavily in compliance infrastructure. Swapped’s failures suggest inadequate investment in regulatory compliance systems relative to business growth.

Competitive Vulnerabilities

Swapped’s compliance issues create significant competitive disadvantages:

Regulatory Uncertainty: Compliance failures may restrict expansion into regulated markets

Partnership Limitations: Legitimate financial institutions may avoid integration due to regulatory concerns

Operational Constraints: Enforcement actions could disrupt core business operations

Financial Analysis

Revenue Model Assessment

Swapped generates revenue through transaction spreads and fees across its payment processing services. The company’s 1.5 million user base represents significant transaction volume potential, but compliance violations threaten sustainable revenue generation.

Growth Sustainability: The acquisition of Kado Software demonstrates expansion ambitions, but regulatory exposure may constrain sustainable growth opportunities.

Cost Structure: Compliance failures suggest inadequate investment in regulatory infrastructure, potentially creating future remediation costs and regulatory penalties.

Investment Recommendation

Risk Rating: HIGH

Swapped presents an unacceptable risk profile for institutional investment consideration:

1. Systemic Compliance Failures: Deep integration with unlicensed gambling operations violates core regulatory requirements

2. Multi-Jurisdictional Exposure: Potential enforcement actions across EU, UK, and other regulated markets

3. Management Credibility: Leadership’s compliance background makes violations particularly concerning

4. Operational Sustainability: Business model relies on relationships prohibited by regulatory framework

Recommendation: AVOID – The company’s compliance violations create unacceptable regulatory and reputational risks that outweigh potential financial returns.

Required Remediation Actions

For Swapped to become investment-worthy, comprehensive remediation would require:

Immediate Cessation: Terminate all relationships with unlicensed gambling platforms

Compliance Overhaul: Implement robust merchant monitoring and KYC/AML procedures

Regulatory Engagement: Proactive cooperation with supervisory authorities

Management Accountability: Clear acknowledgment of failures and remediation commitment

Third-Party Audit: Independent compliance assessment and ongoing monitoring

Whistleblower Call to Action

FinTelegram continues investigating compliance violations in the crypto payment processing sector. Industry insiders with relevant information about Swapped, Gamdom, or similar regulatory violations are encouraged to provide confidential information through the secure Whistle42 platform.

Contact Information: Whistleblowers can safely submit information regarding financial crime and regulatory violations through Whistle42’s secure platform: https://whistle42.com

Conclusion

Swapped.com exemplifies the risks inherent in cryptocurrency payment processors that prioritize growth over compliance. While the company has achieved notable user acquisition and maintains legitimate regulatory registrations, systematic compliance failures create unacceptable investment risks.

The case serves as a critical reminder that regulatory compliance cannot be treated as an afterthought in the evolving cryptocurrency sector. Investors must demand demonstrable compliance frameworks that match the regulatory complexity of digital asset businesses.

Investment Verdict: The combination of systemic compliance failures, multi-jurisdictional regulatory exposure, and management credibility concerns makes Swapped unsuitable for investment consideration until comprehensive remediation is completed and independently verified.

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This investor briefing is based on publicly available information and investigative reports. Investors should conduct independent due diligence and consult with qualified legal and financial advisors before making investment decisions.