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Visa Makes Its Second Investment into a Crypto Startup

Visa co-led a $40 million funding round in crypto startup Anchorage, marking its second-ever investment in a crypto startup.

Global payment giant Visa has recorded its second investment in a crypto project by leading a $40 million funding round of Anchorage startup, according to a Fortune report on July 10.

Visa has reportedly led the round along with major cryptocurrency venture capital (VC) firm Blockchain Capital to support institutional-grade crypto custody service Anchorage, which previously raised $17 million in an investment led by Andreessen Horowitz.

In the new round, both the amount of Visa’s contribution and Anchorage’s private valuation were not disclosed, the report notes. Both Visa and Anchorage are founding members of Facebook’s cryptocurrency project Libra, which was officially revealed on June 18.

As Fortune noted, the recent funding round is the second known investment of Visa in a crypto-related firm, with the payment giant having participated in a $30 million funding round in blockchain startup Chain back in 2015 alongside with Nasdaq and Citi. In late 2018, Chain was acquired by Stellar-focused firm Lightyear.

The new funding will be used in Anchorage’s mission to provide an alternative to cold storage-based institutional custodies to ensure the security of customers’ assets. Instead, the company implements a system of multiple approvals and human reviews, as well as biometric-based software to provide a secure storage of crypto, the report notes.

In late May, Anchorage introduced its insurance coverage solution, opposing it to the majority of custodians that use a combination of cold and hot storage. Claiming that not all coverage of crypto custody insurance is equal, the company announced that they acquired a crime insurance policy, which covers both types of digital asset storage under one policy.

In mid-June, Visa launched “Visa B2B Connect,” a cross-border payment network derived from some aspects of blockchain technology.

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BitGo Launches Custody for Blockchain Capital’s Security Token BCAP

BitGo clients will be able to hold their BCAP assets using qualified and regulated custody service BitGo Trust Company.

Blockchain security firm and wallet service BitGo has announced support for Blockchain Capital’s ERC-20 token, according to a press release shared with Cointelegraph on March 19.

Blockchain Capital’s BCAP token is a security token based on the Ethereum (ETH) blockchain that was launched in a $10 million initial coin offering (ICO) back in April 2017. BCAP represents an indirect economic interest to the limited partnership interest in the tokenized investment fund, and is the world’s first security token that was sold in an ICO.

According to the recent BitGo announcement, BitGo users will now be able to hold their BCAP assets using BitGo Trust Company, a qualified and regulated custodian that provides compliant custody for security tokens. As a part of the announcement, BitGo has also introduced its multi-signature wallet security.

Ben Chan, BitGo’s chief technology officer, said that qualified custodial services that are compliant with securities regulations are critical for users of the platform.

Recently, Estonian Nasdaq-powered digital trading platform DX.Exchange announced the launch of its own security token trading and security token offering (STOs) listings. The platform reportedly allows investors to buy security tokens using both fiat and crypto such as Bitcoin (BTC), Ethereum, Tether (USDT) and Ripple (XRP).

Previously, insurance giant AXA XL launched an insurance product that covers equity crowdfunding and STOs, and purportedly protects new online capital formation techniques, aiming to increase trust, confidence and security to potential investors guaranteeing that the issuer is insured.

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Crypto Execs Remains Bullish, Even Amidst Bearish Setbacks

The cryptocurrency market has had its fair share of fluctuation in the past year or two, with the price of crypto assets reaching all-time highs, just to crash by over 70% subsequently. While this near-unpredictable price action has irked some shorter-term investors (speculative traders), two crypto-centric company execs, Hunter Horsley of Bitwise and Spencer Bogart of Blockchain Capital, recently appeared on Bloomberg to express their continued bullish attitude.

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Firstly, Bitwise CEO Horsley noted that investors may be starting to realize that they overreacted to the SEC’s recent “outright” denial of the Winklevoss’ Bitcoin ETF and the “procedural extension” of the VanEck and SolidX ETF verdict. Backing up this statement, Blockchain Capital partner Bogart noted that regulatory bodies are “running out of reasons to disapprove these things (ETF proposals),” as US-based exchanges have begun to adhere to the SEC’s concerns.

Additionally, Bogart added that the volatility seen in the current state of the crypto market shouldn’t be an issue, as any early-stage industry will experience vast fluctuations in price as investors try to accurately pinpoint a proper value for a certain technology, network, etc.

Bitwise CEO: There’s Still Interest For Crypto, Its Just About The Timing 

Emily Chang, the Bloomberg host leading this segment, then asked the two executives about the current levels of interest in this industry. Bitwise’s CEO, seeming ready to answer such a question, responded by stating:

This is a great question. Over the last few months, we have raised a few million dollars a month. I think what we’ve seen is that this month will be larger than last month… There’s (still) a huge amount of interest and people are wondering on the timing. They don’t want to catch a falling knife — they know that they want to do something, but they don’t know when.

He later brought up the example of the amassment of firms Bitwise has talked to, noting that 75% of 500 representatives from hedge funds, pension groups, family offices, and more would consider making a capital allocation into crypto. Horsley also noted that these firms will need to get comfortable with a crypto investment thesis before making a foray.

Expanding more on this interest, Bogart drew attention to other fundamental indicators, such as the number of developers active in developing blockchain-related solutions and the institutions that are starting to stand behind this nascent industry. The Blockchain Capital partner specifically brought up the example of Goldman Sach’s crypto trading desk, which Ethereum World News has reported on in the past, along with custody solutions for security-wary funds who have invested in digital assets.

But then again, as any logical industry leader would point out, Bogart points out that it obviously makes sense why crypto is in a slump now, as the bull run seen in 2017 was evidently unsustainable. Seemingly sharing a near-identical mindset, Bitwise’s executive added that the worldwide deployment of crypto assets and crypto-related (blockchain-related) technologies may take upwards of 10 years, as the internet did.

Closing off this interview, Bogart issued a short, but sweet statement about where the crypto market is now, and where it is headed in the near future. He stated:

The overall time is the biggest tailwind here… I think that this is market that is emerging outside of the core of the legacy financial industry, but its head directly for it.

Photo by Giovanni Calia on Unsplash

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Airbnb Co-Founder Participates in Almost $23 Million Funding Round for Crypto Startup

Cryptocurrency trading platform SFOX has announced the closure of a $22.7 million Series A funding round with participation from Airbnb co-founder Nathan Blecharczyk, according to an August 16 press release.

Co-founder and partner at Tribe Capital and Social Capital, Arjun Sethi, led the Series A funding round for the U.S.-based cryptocurrency dealer SFOX, with participation from Y Combinator, Khosla Ventures, Digital Currency Group, Blockchain Capital, and Blecharczyk.

The press release notes that the cryptocurrency dealer aims its services at “large-scale investors such as funds, family offices, and high-net-worth individuals,” and has more than $9 billion in transaction volumes to the present.

Sethi stated in the press release that the ability for institutions to “trade from a single account” and “buy and sell high volumes without impacting prices” is “exactly what institutional investors looking to embrace cryptocurrencies need […] as the ecosystem becomes more fragmented.”

The company’s Medium post notes that the goal of the funding round is to add cryptocurrency pairs, improve trading liquidity, and expand into “new geographical regions.”

Earlier this week, enterprise-focused blockchain startup Axoni had raised $32 million in a funding round led by Goldman Sachs and Nyca Partners, with other investors including Wells Fargo, JPMorgan, Citigroup, and Andreessen Horowitz.

In July, the venture capital arm of General Electric (GE) joined a $12 million investment round in blockchain startup Xage Security, along with City Light Capital and NexStar Partners.

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Radar Relay Raises $10 Million for Decentralized Token Exchange

Decentralized token exchange Radar Relay has completed a $10 million Series A funding round.

The funding effort was led by industry investment firm Blockchain Capital, the startup announced Wednesday. Tusk Ventures, Distributed Global, Reciprocal Ventures, Elefund, Slow Ventures, SV Angel, Kindred Ventures, Collaborative Fund, Breyer Capital, V1.VC, Kokopelli, Village Global, Chapter One and Digital Currency Group also contributed funds.

The money will be used to expand the startup’s community team and start new research and development projects, according to CEO Alan Curtis. The funding effort comes after Radar Relay raised $3 million in December 2017 in a round also led by Blockchain Capital.

Radar Relay provides a wallet-to-wallet trading platform for ethereum tokens. Investors can connect their wallets to the platform to exchange tokens directly, without the startup ever taking any tokens into custody.

The company sought to raise the funds due to the platform’s popularity, Curtis added. While the platform appears to be widely used, only a small portion comes from the U.S., which makes providing support for the vast majority of Radar Relay’s users difficult.

The company now hopes to expand the team in order to help reduce some of these concerns.

Curtis explained:

“We are supporting users from 150 countries. Of those countries, less than a third of our users are from the United States, which means we have to have core competencies in those [other] countries. Part of this funding is to establish a community ambassador program in those countries so we can serve our customers abroad.”

The community ambassador program will see Radar Relay hire individuals fluent in various languages and able to provide support for users, he said. But according to Curtis, the startup’s beta phase saw a notable amount of activity from users.

“We just left beta about a month ago and during that beta we saw $1 million in transaction volume,” he said.

As such, expanding the team to meet support demand will be a key focus for the next month or so. Alongside that, Curtis added, the firm plans to start exploring how to support security tokens and crypto collectibles.

Ethereum token wallet image via Shutterstock

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Bitcoin ‘Waiting for Reasons to Go Higher’, Says Blockchain VC Partner Spencer Bogart

Blockchain Capital partner Spencer Bogart compared Bitcoin (BTC) to a “tinderbox” July 26, telling CNBC prices could grow further due to multiple “catalysts.”

Speaking to CNBC’s Fast Money, Bogart, who is regular commentator on the network and on cryptocurrency social media, adopted a notably bullish tone compared to just weeks ago when Bitcoin was trading around $6,000.

“Any number of catalysts could send bitcoin exploding higher,” he forecast, adding:

“Bitcoin is kind of a tinderbox right now, waiting for reasons to go higher.”

Bogart’s increasing optimism adds to a popular narrative in the cryptocurrency industry that has grown out of Bitcoin’s sudden price increase of over 33 percent this month, the majority of which occurred over the past ten days.

At press time Thursday, BTC/USD traded around $8,233 according to Cointelegraph’s price index.

Like many commentators, Bogart highlighted potential regulatory approval of a Bitcoin exchange-traded fund (ETF), geopolitical and macroeconomic “tensions” and continued interest in blockchain integration for payments from big business such as MasterCard in July.

Despite consensus building that the ETF approval will have to wait until September or even longer, Bogart said the status quo could not continue infinitely.

“The cat’s out of the bag,” he continued to CNBC reporters, “[i]nnovation is going elsewhere if the SEC [U.S. Securities and Exchange Commission] doesn’t get on board soon.”

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A Crypto Company Could ‘Overtake’ Wall Street’s Biggest Banks, Says Blockchain VC

Spencer Bogart, a partner at Blockchain Capital, said that other banks will follow Goldman Sachs’ example in opening a crypto trading desk, according to CNBC’s Fast Money today, May 4.

Goldman Sachs reported yesterday that they would soon open a trading desk for Bitcoin (BTC) contracts after being “inundated” with client requests.

Although Bogart told CNBC that the news is “definitely a big step,” he doesn’t think that it’s a “perfect solution, that all of a sudden now just opens the floodgates to the institutionalization of Bitcoin.”

Bogart added that his reasoning that banks will follow Goldman Sachs is not particularly because of the Goldman Sachs name, but because “this market is so large you can’t ignore it anymore”:

“Most of these banks have heard about the numbers or seen the numbers that companies like Coinbase and Binance are putting up. There’s a real risk that some of those companies could overtake some of Wall Street’s biggest banks if they don’t get in the market.”

As Goldman Sachs will currently only be working with derivatives products, Bogart noted that the next problem to solve will be custody, in the event that Goldman Sachs would add direct trading of Bitcoin.

When asked about the future of cryptocurrency, Bogart told CNBC that the most important question to answer is about the crypto “flow,” which he believes will see an addition of new buyers:

“Is the flow going to be greater from hodlers to non-hodlers, or from non hodlers to hodlers?”

Just this past month alone, Goldman Sachs has seen several of its executives move over to the crypto sphere, with former Goldman Sachs employees now working at a crypto merchant bank, a crypto wallet, and a crypto startup.

At the end of April, Goldman Sachs hired crypto trader Jason Schmidt as VP of digital asset markets in their securities division to help clients work with cryptocurrencies.