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Cryptocurrency Custodian Anchorage Adds Insurance Coverage

Cryptocurrency custody services firm Anchorage has added insurance coverage for storing digital assets.

Cryptocurrency custody services firm Anchorage has added insurance coverage for storing digital assets, it announced in a blog post on May 29.

In the post, Anchorage — which raised $17 million in a Series A round led by Andreessen Horowitz —  announced insurance coverage for institutions that covers digital assets under custody.

The coverage comes as the result of a partnership with major insurance broker Aon.  Previously, Aon stated that the firm was seeing more cryptocurrency-specific protections catering to the new cryptocurrency industry.

Anchorage outlined in the post that not all coverage of cryptocurrency custody insurance is equal as most custodians use a combination of hot and cold storage, on which policies may differ.

The custody firm stated that it has acquired a crime insurance policy, which ostensibly covers both types of digital asset storage under one policy.

When launched in January, Anchorage claimed to be based on the principles of easy access to assets, voting, auditing proof of existence, and quick transactions. Anchorage stated that large scale investments in digital assets, such as those from institutional players, will bring new growth to the blockchain space.

In March, insurance giant AXA XL and insurance technology startup Assurely jointly rolled out a new insurance product dubbed CrowdProtector, that covers equity crowdfunding and security token offerings.

Earlier in May, Alexandre Kech, CEO of Onchain Custodian, predicted that collaboration between cryptocurrency and traditional custodians will grow. By Kech’s reasoning, traditional custodians are often reluctant to take on new coins due to institutional barriers. They partner with crypto custodians so that they can gain access to these assets for their customers.

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Cornell Uni’s Emin Gun Sirer Debuts Ava Blockchain Following $6 Million Investment

Emin Gun Sirer, the creator of the first PoW-based crypto, plans to build a blockchain that will enable apps “that aren’t even possible yet.”

Emin Gun Sirer, a professor at Cornell University and a major global blockchain expert, will launch his own cryptocurrency and blockchain network, Bloomberg reported on May 16.

Sirer, the creator of the first crypto based on proof-of-work (PoW) — Karma System — is now planning to launch a blockchain network that he touts as running as many transactions per second as payment giant Visa.

Having raised $6 million from major investors such as Andreessen Horowitz, Polychain and MetaStable in February, Sirer’s Ava Labs has reportedly launched a private test version of the Ava network on May 16, while the public launch is expected to be rolled out soon. The first coins are set to be issued once the blockchain is available to the public, the report notes.

Sirer stated that the Ava network will obtain 1.35 second confirmation latency and purportedly enable applications “that aren’t even possible yet,” adding that his ultimate goal is to record every single certificate on the blockchain.

Sirer, 47, is the co-director of the Initiative for Cryptocurrencies and Smart Contracts at Cornell University. He is known for his selective approach to crypto based on the actual use of various cryptocurrencies. As such, Sirer has urged that people should only invest in and hold coins which they believe “will be used, extensively, in the long run,” arguing that cryptos that are bought on hype “are pure speculation.”

Sirer’s stance on crypto was recently echoed by Galaxy Digital CEO Michael Novogratz, who claimed that each altcoin will have prove themselves by providing a certain use case. Speaking at ConsenSys’ recent Ethereal Summit, Novogratz argued that if “bitcoin is gonna win this store of value, everything else needs to be used for something.”

Cointelegraph recently interviewed Sirer about his views on the future of crypto from an academic point of view concerning the technology.

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Stalwart Crypto Investor Andreessen Horowitz Raises $2.75 billion for Two New Funds

Silicon Valley-based venture capital firm and high-profile crypto investor Andreessen Horowitz has raised $2.75 billion for two new funds.

Silicon Valley-based venture capital firm and high-profile crypto investor Andreessen Horowitz has raised $2.75 billion for two new funds, according to a company announcement published on May 1.

The lion’s share of the new capital will go toward a specialized $2 billion late-stage venture fund (LSV Fund I), headed by Andreessen Horowitz general partner David George.

The $750 million has meanwhile been raised for a sixth general fund — focused on early-stage enterprise, consumer and fintech offerings — which will sit alongside the company’s existing specialized cryptocurrency and bio funds.

As managing partner Scott Kupor notes in yesterday’s announcement, cryptocurrency was still in its nascency when the venture capital firm launched in 2013. The creation of its crypto-dedicated $350 million crypto fund, a16z —  which backs a range of ventures from blockchain projects to initial coin offerings (ICOs) — prompted the firm to hire its first female general investing partner in 2018, as Cointelegraph reported at the time.

Since then, Andreessen’s Horowitz’s $350 million crypto fund, a16z, has invested in blockchain startup MakerDAO (MKR) — which stands behind ether-based stablecoin Dai (DAI) — stablecoin project Basis and institutional crypto custodian Anchorage, as well as blockchain cloud computing startups DFINITY and Oasis Labs.

This February, the University of Michigan’s $12 billion endowment revealed plans to bolster its investment in Andreessen Horowitz’s “cryptonetwork technology fund” (CNK Fund I).

Andreessen’s Horowitz’s website also lists bitcoin (BTC), ether(ETH), decentralized DNS startup Handshake, dYdX exchange and stablecoin trueusd operator Trusttoken among its crypto-related investments.

Last month, Andreessen’s Horowitz announced it was restructuring by registering all of its employees as qualified financial advisors and renouncing its former status as a venture capital firm. The restructuring will ostensibly enable the company to take riskier bets on certain business areas, including cryptocurrencies.

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Celo Raises $30 Million for Stablecoin-Based Smartphone Payment Plans

Celo plans to use a dedicated USD-backed stablecoin to provide unbanked consumers with payment options.

Blockchain payments startup Celo has raised $30 million from well-known crypto investors Polychain Capital and Andreessen Horowitz, the Wall Street Journal (WSJ) reported on April 2.

Celo, which is the trading name of A Protocol Inc., plans to use an in-house digital token and stablecoin to facilitate cross-border payments, primarily focusing on the unbanked using smartphones.

Having raised $6.4 million in previous cash injections, the company is now conducting pilot-phase tests in Argentina.

“We see big potential in letting people — directly on their smartphone — access basic financial services,” Rene Reinsberg, cofounder of Celo, told the WSJ. He added:

“We are based on blockchain technology but for the average end user we try to abstract that away, to make the experience as easy as any other mobile app.”

The allure of borderless payments without the need for banking credentials has long formed a preoccupation for cryptocurrency startups. Several years ago, offerings such as BitPesa were already active, with Kenya first in line for disruption due to its heavy smartphone payments penetration.

Long-term, Celo plans to woo developers to build additional services on top of its platform. Of its two custom-built tokens, one will function as a transaction verification tool, while the other will be a U.S. dollar-backed stablecoin.

The latter, dubbed the Celo Dollar, should end up as the native cryptocurrency for users sending payments to each other. Its creation builds on a current trend in the industry, which continues to see various stablecoin assets appear, so far tied primarily to USD and the Japanese yen.

As Cointelegraph reported in February, Celo hired fellow payment network Circle’s Chuck Kimble, who was involved with the company’s own stablecoin launch, as head of strategic partnerships.

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Andreessen Horowitz Restructures, Registering Entire Staff as Financial Advisors

American venture capital firm Andreessen Horowitz has renounced its venture capital exemptions and registered as a financial advisor.

American venture capital firm Andreessen Horowitz is restructuring by registering all of its employees as qualified financial advisors, Forbes reported on April 2.

Andreessen Horowitz — a Silicon Valley company specializing in investing mostly in technology and financial services startups, having raised $1.7 billion across seven funds — told Forbes that it is registering their all 150 employees as financial advisors, which renounces the company’s status as a venture capital firm entirely.

The restructuring will purportedly enable Andreessen Horowitz to take riskier bets on certain business areas, including digital currencies. “If the firm wants to put $1 billion into cryptocurrency or tokens, or buy unlimited shares in public companies or from other investors, it can. And in doing so, the thinking goes, it’ll again make other firms feel like they have one hand tied behind their back,” it further explains.

This spring, Andreessen Horowitz reportedly gave up its venture capital exemptions and registered as a financial advisor. The move required a ban on its investors speaking plainly about their portfolios or funds performance in public, among other things like auditing each employee.

At the same time, the company’s partners can now openly share deals in cases like a blockchain startup for home buying wherein a real estate expert tag-teams a deal with a cryptocurrency expert.

Last September, Andreessen Horowitz invested $15 million in blockchain startup MakerDAO (MKR). Andreessen Horowitz via its investment fund a16z acquired 6 percent of the total MKR token supply. The purchase was set to allow a16z to manage MKR and the Dai Credit System as it reportedly becomes “the first” decentralized autonomous stablecoin organization.

In June of last year, Andreessen Horowitz hired Katie Haun as its first female general investing partner to run the company’s newly formed $300 million cryptocurrency fund. The firm’s crypto fund is designed to invest in a range of companies from blockchain projects to initial coin offerings.

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Andreessen Horowitz Backs Dfinity With Largest Crypto Investment Yet

Dfinity, Cryptocurrency–Andreessen Horowitz (A16Z), the popular venture capital firm of Marc Andreessen and Ben Horowitz, has announced its most ambitious cryptocurrency investment to date in the form of new blockchain project Dfinity. Billed as a company to reinvent cloud computing and challenge the current market leaders of Amazon Web Services and Saleforce, Dfinity looks to implement a cheap, decentralized alternative that utilizes cryptocurrency and blockchain at its core. It refers to its ambitious new project as a “world computer” and “Cloud 3.0”–two statements that have been taking the investment circuit by storm.

Earlier in the week, the company reported securing a $102 million round of funding, with Andreessen Horowitz making up one of the more high profile investors, in addition to the $61 million raised in March. While blockchain based projects are becoming a dime-a-dozen in the current landscape of tech fundraising, Dfinity plans to distinguish itself through a number of innovations related to scalability, in addition to utilizing the already proven secure nature of cryptocurrency. By basing the project on a decentralized framework, Dfinity looks to cut both costs and bureaucratic clutter by removing the singular entity at the heart of the computing enterprise, a step over monolithic competitors like Amazon Web Services.

Speaking in an interview with Fortune and on a blog post about the new project, Chris Dixon of Andreessen Horowitz expanded upon why their firm had placed its largest blockchain-based investment in Dfinity, in addition to praising the prowess of founder Dominic Williams and the development team,

“Decentralized computation networks like DFINITY stand to bring us closer to a world where digital platforms can be constructed from trustless, autonomous, and open source software that is owned and governed by communities of users and developers, rather than companies.”

Dixon is holding to a realistic view of a timetable for Dfinity adoption, as well as how the company can grow via a stepping stone approach to the marketplace. Rather than immediately going after the major clients for both Microsoft and Amazon, Dixon outlines how Dfinity can first find traction in the world of academia and startups while building towards the cost-saving, improved utility features that will be attractive to large firm companies.

While Dfinity has avoided referring to its project as an initial coin offering or in any way issuing coins that come at the cost of regulatory hurdles down the road, the company has been proactive by instituting an airdrop this past May which saw the distribution of $35 million tokens to early investors. The company is eyeing Ethereum as a potential opponent in the space of cryptocurrency, with plans to challenge the second coin by market capitalization as the leader in instituting smart contracts.

Dixon, again speaking with Fortune, attempted to downplay the competition between Dfinity and Ethereum, stating that the two coins will offer complimentary services. However, he did find time to comment that Dfinity is a currency better poised for large projects and overcoming the barrier to scale currently faced by most cryptos, while still lauding Ethereum for its high energy and development enthusiasm.

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Andreessen Horowitz, Polychain Capital Lead Blockchain Startup’s New $105 Million Funding Round

Swiss and US-based blockchain cloud computing startup DFINITY has closed a new funding round worth over $100 million from repeat backers including Andreessen Horowitz, it confirmed August 29.

DFINITY, which aims to build what it describes as an “Internet Computer,” raised a total of $102 million Swiss francs ($105 million) from partners that also featured blockchain-focused investment outfit Polychain Capital.

Both Polychain and Andreessen via its investment fund a16z had previously participated in the startup’s investment, contributing to a $61 million round in February.

Having raised a total of just under $200 million since its foundation in 2015, DFINITY ultimately wants to create a platform which will “host the world’s next generation of software and services on a public network,” TechCrunch quotes a16z partner Chris Dixon as saying.

“The Internet Computer is on track to become a critical piece of the future technology stack,” he added.

The move marks a further commitment from Andreessen to the cryptocurrency sphere, the company in April becoming part of a $133 million funding round in blockchain project Basis’ stablecoin.

More recently, in July, Andreesen participated in a $45 mln funding round for blockchain cloud computing platform Oasis Labs as part of its plan to help companies adopt blockchain.

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Crypto Presents a Challenge Beyond Hard and Fast Asset Classifications, Say Speakers at US House Committee Hearing

Witnesses before the U.S. House of Agriculture Committee at a public hearing July 18 were unanimous in their view that digital assets complicate the hard and fast distinctions of existing regulatory frameworks.

The hearing was chaired by Texas U.S. Representative Michael Conaway, who convened six eminent witnesses to give testimony — former Goldman Sachs partner and U.S. government regulator Gary Gensler, Andreessen Horowitz managing partner Scott Kupor, the CFTC’s Daniel Gorfine, law professor Joshua Fairfield, Clovyr CEO Amber Baldet, and Perkins Coie managing partner Lowell Ness.

A key takeaway from the hearing was that a given digital asset may shift its regulatory status as it transitions from one context to another, given the fluidity of the crypto ecosystem.

Both Gensler and Fairfield argued that when a digital token is marketed at a “pre-functional” moment in its development — i.e. during an Initial Coin Offering (ICO) — then the sale is judged an investment contract and thus a security to be regulated by the Securities and Exchange Commission (SEC)

Critically, however, crypto tokens may cease to be securities once they become used in a decentralized network as a utility token as, for example, in the case of Ethereum (ETH). This means that a digital asset may at one point be an SEC-regulated security, only to later become a commodity of relevance to the Commodity Futures Trading Commission (CFTC).

As Gorfine outlined, the CFTC does not generally exercise direct oversight of the underlying commodity markets themselves, but rather regulates derivatives such as the futures or swaps markets.

Gensler proposed that state of the “underlying cash-crypto markets” is presently “at best a wild west,” and that the CFTC potentially requires more authority and resources to deal with the challenge. The SEC, for its part, could need 2-4 years to address the “thousands” of “noncompliant” actors in the ICO space, he said.

Ness warned that over-aggressively extending securities classifications could seriously impede the crypto space, which has evolved precisely to create a network that allows for “value transfer at the speed of software.”

The SEC notably requires that the beneficial ownership of an asset can be determined at any given time, something that Gensler said was not yet technologically feasible to achieve in a frictionless way in the crypto space.

In response to committee members’ concerns that crypto can be used for illicit activities, Kupor suggested that “Bitcoin is law enforcement’s best friend,” given that pseudonymous transactions can ultimately be traced using intelligence tools that analyze traffic on the blockchain.

Ness quipped that “the alleged Russian hackers were caught because they used Bitcoin,” in reference to the recent indictment that charged twelve Russian nationals with using crypto to fuel their efforts to “interfere” in the 2016 U.S. presidential elections.

In mid-May, a U.S. House Subcommittee hearing on blockchain in supply chains concluded that the technology has a variety of applications, even without industry-wide standards.

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CFTC Official to Congress: Don't Be 'Hasty' With Crypto Rules

The director of the Commodity Futures Trading Commission (CFTC)’s fintech initiative cautioned against what he called “hasty regulatory pronouncements” during a Congressional hearing on Wednesday.

The remarks from Daniel Gorfine, director of LabCFTC, were directed toward members of the U.S. House Committee on Agriculture which, as reported by CoinDesk, sought testimony on the issue of cryptocurrencies and digital assets. Alongside Gorfine were former JPMorgan blockchain lead Amber Baldet, former CFTC chair Gary Gensler and A16Z managing partner Scott Kupor.

Gorfine framed his remarks from the perspective that many different things can be considered “commodities” – but not all of them would warrant attention from U.S. regulators.

“It’s only when we start to see the rise of futures or swaps products built on those commodities that we have kind of direct oversight,” he remarked, going on to state:

“We all have the shared goal to bring clarity and certainty to the market but [we] also need to be sure that we are thoughtful in our approach and do not steer or impede the development of this area of innovation. Indeed, while some may seek the immediate establishment of bright lines, the reality is that hasty regulatory pronouncements are likely to miss the mark, have unintended consequences, or fail to capture important nuance regarding the structure of new products or models.”

Gorfine would return to that point several times during the hearing, which began at 10 a.m. local time.

“It’s important that we’re not hasty in figuring out what the contours are of applying securities law and then the commodities framework,” he remarked.

Congressional sentiment

The hearing notably provided a window into what some members of Congress think when it comes to the subject of cryptocurrencies – though it wasn’t positive in some cases.

For example, Rep. Collin Peterson remarked that, in his view, much of the cryptocurrency ecosystem “seems like a Ponzi scheme” and asking “what’s behind this?”

It was Gensler who offered a response, stating that “there’s really nothing behind gold either … what’s behind it is a cultural norm, for thousands of years we liked gold.”

“We do it as a store of value, so bitcoin is a modern form of digital gold. It’s a social construct,” he continued.

In other cases, committee members simply wanted more information on how cryptocurrencies exactly work.

“We’re creating another money supply here as I see it. I just don’t know how that works. Our dollar sets the mark for the world. I can’t visualize how this would work,” Rep. Rick Allen commented.

But it was Michael Conaway, the chairman of the committee, who perhaps had one of the most notable – and telling – remarks about bitcoin, coming at the very end of the hearing and just days after the U.S. Justice Department claimed it had traced bitcoin transactions conducted by 12 Russian intelligence officers accused of hacks during the 2016 presidential election.

“As long as the stupid criminals keep using bitcoin it’ll be great,” Conaway quipped.

Want to read CoinDesk’s full by-the-second coverage of the hearing? Follow our stream on Twitter here

Daniel Gorfine image via House Agricultural Committee

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.