Helsinki’s claim to crypto fame – Cointelegraph Magazine

This “Crypto City” guide looks at Finland’s crypto culture: The most notable projects and people, its financial infrastructure, which retailers accept crypto, and where you can find blockchain education courses.

City: Helsinki
Country: Finland
Population: 1.55 million 
Established: 1550
Languages: Finnish and Swedish, with English widely spoken

Jump to: Crypto culture, Where to spend crypto in Helsinki, Crypto projects and companies, Local crypto controversies, Crypto education and community, Notable crypto figures from Helsinki

Situated on the Gulf of Finland, Helsinki is the capital of Finland and is arguably the world’s most northern metropolis, with 1.5 million people — 30% of the country’s population — calling the metro area home. Its inhabitants spend winter in a cold, still darkness but enjoy 11:00 pm sunsets in summertime.

Major population centers are nearby, with both Tampere and Turku reachable in two hours via road or rail. There are regular ferry services across the Baltic — including to Estonia’s capital of Tallinn, which can be reached in two hours by sea, and there are also plans to link the cities via an undersea tunnel. The nearby Helsinki-Vantaa airport is the country’s main international gateway and serves as a transfer hub for Asia.

Finland has been ranked the happiest country in the world for six consecutive years by the World Happiness Report. Its income tax rate tops out at 56% — one of the highest in the world — and the tax data of every resident is public. Helsinki played host to the 1952 Summer Olympics. The country joined the European Union in 1995 and adopted the euro as its currency in 1999. In 2023, Finland became a member of NATO.

As the capital, Helsinki’s crypto events draw participants from across the country, making it the natural meeting place for the industry. For that reason, projects and companies from nearby cities like Tampere and Turku are also included here.

The area was first settled around 5000 BC as the ice age retreated. Vikings raided the established settlements, as did Swedish crusaders in the 10th and 13th centuries. The city was formally established in 1550 as a Swedish trading post, defended by Suomenlinna (Finland’s fortress), the largest sea fort in Europe. Later, under Russian control as the Grand Duchy of Finland, the emperor moved the capital from Turku to Helsinki, which was closer to St. Petersburg. Finland became independent in 1917, after which it resisted Soviet occupation in the 1940 Winter War.

Helsinki’s claim to crypto fame rests with Martti Malmi, a software developer who in 2009 sold 5,050 BTC for a $5.02 PayPal transfer, marking the first time that Bitcoin was exchanged for fiat currency. It occurred before the much better-known May 22, 2010, “Pizza Day,” when Bitcoin was first used to purchase a physical good. Eventually, Malmi used most of his Bitcoin to purchase a studio in the metro area. If he’d hung on to it, it’d be worth $171 million today. The Bitcoin was used to seed an exchange called New Liberty Standard, which established the first BTC price of 1,309.03 BTC for $1.

Found the first known bitcoin to USD transaction from my email backups. I sold 5,050 BTC for $5,02 on 2009-10-12. https://t.co/8XcBmzJljf

— Martti Malmi (@marttimalmi) January 15, 2014

Malmi was, in some ways, a product of his environment, with Helsinki recognized as a bed of technical innovation since Nokia began to dominate the cellphone market. In 1991, Linus Torvalds began working on what became Linux at the University of Helsinki. It is also home to many video game companies, with local firm Rovio’s Angry Birds achieving global fame in 2009. Helsinki is also the home of Aave founder Stani Kulechov, though he has moved abroad with the company.

In 2019, a then-staunchly Bitcoin maximalist group called Konsensus organized the translation of Saifedean Ammous’ 2018 book The Bitcoin Standard into Finnish, and later also translated The Little Bitcoin Book by The Bitcoin Collective. According to one member, the organization has since become more accepting of other cryptocurrencies and blockchain use cases.

The “crypto community” in Helsinki and Finland is somewhat disorganized and divided, with many enthusiasts being interested in one facet — be it Bitcoin, NFTs or Web3 — without embracing the whole, and thus having few common threads. Still, a certain grassroots energy is evident.

Paying with Bitcoin is not common in Finland, where card and app payments dominate. One notable exception is the restaurant Faro, at which a few people are likely to buy a burger and beers with sats at the monthly Bitcoin meetup.

On the bar side, Taudo Baari and Time Bar also accept crypto. There is also the Osuva shooting range.

Samuel Harjunpää, CEO and co-founder of hardware startup Xellox and regular at the Faro Bitcoin meetup, tells Magazine about the state of Bitcoin acceptance:

“A few restaurants and bars have already been ‘orange-pilled’ — the biggest obstacles are the payment infrastructure and bookkeeping.”

Today, Helsinki has a vibrant tech and startup scene with many coworking spaces. The city is also host to the annual Slush startup conference, which draws 25,000 participants.

Web3 Helsinki is a student-run organization that organized its first event on April 20, 2020, with about 150 people in attendance, making it perhaps the largest single crypto event of the year.

2023’s events have included the Web3 Bash in late April, followed by the Aurora Nordic Web3 Conference in June. On June 6, the BRIDG3 Blockchain summit was held at Tampere’s Nokia Arena, focusing on Web3, the metaverse and decentralized autonomous organizations.

The Finnish Bitcoin Association was established on May 6, in an event attended by Magazine, with membership fees paid primarily with Bitcoin via the Lightning Network. Upon the conclusion of formalities, the saunas of the hosting coworking space were fired up.

For those interested in NFTs, Fungi is a platform advertising a no-code solution that lets organizations build NFT-based communities. One of these was a metaverse island called Cornerstone for VR studio ZOAN, where 100 plots could be purchased as NFTs.

HABBO NFT, operated by the local creators of the 23-year-old online chat room game HABBO Hotel, has dropped an 11,600-piece avatar collection on OpenSea and is currently developing an NFT-based game. A group called The Future of Art has also dedicated itself to promoting digital art and runs an NFT gallery.

An aspiring LinkedIn competitor, Kleoverse, is a “proof-of-talent” Web3 platform for recruiters and jobseekers that displays skills such as knowledge in programming languages through badges instead of text on a resume.

Phaver is building a Web3 social media app powered by Lens Protocol, which bills itself as the “social layer of Web3.” Phaver is one of many local projects that have worked with tech design studio STRGL, which specializes in protocol-level Web3 solutions. STRGL’s managing director, Kasper Karimaa, sees Helsinki as a haven for developers:

“Finland’s role in blockchain innovation through its agile engineering community makes Helsinki the perfect place to assemble a skilled team in research, design and development.”

One of the most widely known crypto companies in the country was the P2P exchange LocalBitcoins, which employed about 50 people before closing its doors in February 2023. CEO Nikolaus Kangas told Cointelegraph that this was due to a failure to “turn our trade volumes and declining market share back to growth.”

Bittiraha, which translates to “bit money” in Finnish, is another old local crypto company. It was founded circa 2012 and installed the country’s first Bitcoin ATM at the Helsinki railway station in December 2013.

The company was also a distributor of Casascius physical Bitcoin and eventually made its own line of “Denarium” wallets. The parent company, Coinmotion — based a few hours north in Jyväskylä — now operates a cryptocurrency exchange.

Another major Finnish exchange called Northcrypto can be found in Turku.

A euro stablecoin has also been developed in the city. Membrane Finance’s EUROe was launched in February 2023 and is designed to be an “EU-regulated full-reserve stablecoin” that is compliant with recent legislation. While this is notable considering the relatively few operational euro stablecoins, volume remains low at approximately $20,000 per day.

Helsinki native Anita “Krypto Granny” Kalergis spends most of her time in Dubai, where she organizes blockchain conferences. She feels that Finnish entrepreneurs and decision-makers lack bravery, preferring to wait for someone else to take the lead and for regulatory certainty both from the national and EU levels. “Most activity is not advertised, with especially older business people afraid to rock the boat or make major moves,” she observes.

“Companies here will build something to 95% completion before opening their mouth, whereas projects in other countries will raise money and build partnerships based on a white paper while ‘testing in production.’”

In 2018, the Finnish customs service planned to auction 1,666 BTC that it had seized in a drug case, but decided not to proceed “due to concerns that the virtual money would return to the hands of criminals,” displaying a rather negative official view of cryptocurrency. In July 2022, the state eventually auctioned nearly 2,000 BTC for $47 million, with proceeds being donated to Ukraine. 

In December 2021, local media reported a trend of investment scams involving the faces of prominent people, including industrialist Heikki Herlin and then-Prime Minister Sanna Marin. 

Earlier in 2018, the police also made warnings regarding a trend of Bitcoin blackmail relating to bogus claims that hackers had webcam material of users visiting pornographic websites. In 2022, a Helsinki watch dealer fell victim to a common crypto scam, handing over Rolex watches worth $400,000 after mistakenly believing that he had received a Bitcoin transaction.

Cryptocurrency, often adjacent to scams in the news, has come to be viewed with a relatively high degree of suspicion across most of society. Commenting on the decision to halt the 2018 customs seizure sale, Pekka Pylkkänen, head of finance at the Finnish Customs Service, highlighted concerns about money laundering, telling national broadcaster YLE that “the buyers of cyber currency rarely use them for normal endeavors.”

National media regularly interview outspoken cryptocurrency critic Aleksi Grym, head of fintech for the Finnish Central Bank, as an authoritative expert without seeking alternative pro-cryptocurrency views, though coverage has been improving.

As one may notice from this article, the term “Web3” is preferred, presumably due to its distancing from the negative stereotypes of cryptocurrency.

Neither the country’s political establishment nor any major party or other large grouping of the population could be described outright as being “pro-crypto.”

One reason for this could be Finland’s stable, highly functional, and high-trust society, in which most people do not see the need to “disrupt” or fix something with cryptocurrency. Bank transfers are free and near-instantaneous across the EU, with cash use increasingly rare. Virtually nobody is unbanked, and the most trusted institution is the police, with 95% public support. Harjunpää, whose startup is working on solutions to protect private keys, explains the disconnect:

“Many people don’t understand Bitcoin and think it’s something between criminal money and a pyramid scheme.”

It is also notable that the “moon” mentality and dreams of quick wealth found in many cryptocurrency investors are generally seen in a particularly negative light, with Malmi noting that he never set out to make money with Bitcoin, “perhaps owing to Finnish culture” and his idealistic mentality.

In the same vein, cryptocurrencies are seen by some as drivers of inequality in a country where large differences in wealth are often considered taboo.

The Finnish Innovation Fund, or Sitra, has stated it as a priority to accelerate the local development of Web3 services, saying that “it’s in Finland’s interest to play an active role in ensuring that the metaverse is created in line with European values.”

The fund has also worked with the Finnish National Gallery to create The Finnish Metagallery, an art gallery in the Decentraland metaverse whose building is modeled from the Finnish Pavilion as it appeared at the 1900 Paris World Fair.

In the old capital of Turku, The University of Turku hosts the Critical Inquiry Into DAOs (CIDS) research group, of which the author is part.

Martti Malmi, the first person to sell Bitcoin for fiat; Henri Brade, board member of Coinmotion; Aleksi Löytynoja, CEO and co-founder of Kleoverse; Niko Laamanen, founder of Konsensus.

Martin Wichmann, chairman of Konsensus; Antti Innanen, founder of Fungi; Sointu Karjalainen, founder of The Good Cartel; Juha Viitala, CEO and co-founder of Membrane Finance; Mika Timonen, founder of Habbo NFT; Olli Tianinen, CEO of Equilibrium Labs; Kasper Karimaa, managing director at STRGL; Jarmo Suoranta, CEO of TX – Tomorrow Explored.

Keir Finlow-Bates, CEO of Chainfrog; Ville Runola, CEO and founder of Northcrypto; Samuel Harjunpää, CEO and co-founder of Xellox; Joonatan Lintala, CEO and co-founder of Phaver.

Cointelegraph team members often found in Helsinki: Elias Ahonen.

If you have any suggestions for additions to this guide, please contact eliasahonen@cointelegraph.com.

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Elias Ahonen

Elias Ahonen is a Finnish-Canadian author based in Dubai, who bought his first Bitcoin in 2013 and has since worked around the world operating a small blockchain consultancy. His book Blockland tells the story of the industry. He holds an master’s degree in international and comparative law and wrote his thesis on NFT and metaverse regulation.

Follow the author @eahonen