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Crypto Startup Circle to Seek Banking License in US

Cryptocurrency startup Circle is seeking to register as a federally licensed bank in the U.S., according to Bloomberg.

In a report published Wednesday, Bloomberg said that alongside the banking license, Circle – which offers a cryptocurrency wallet and investment platform, as well as an OTC crypto trading service – would also seek to register with the Securities and Exchange Commission (SEC) as a brokerage and trading platform.

The move from the Goldman Sachs-backed firm, if successful, would allow it to trade crypto tokens that are considered as securities in the U.S. and would also help it circumvent the complexities of registering as a cryptocurrency firm with regulators in all 50 states.

“You’re able to have a single conversation,” Circle’s chief compliance officer, Robert Bench, told Bloomberg. “It’s hard to have 50 conversations.”

Following early talks with the Office of the Comptroller of the Currency over the banking registration, as well as with the SEC and the Financial Industry Regulatory Authority, Circles said it would likely seek SEC regulation before moving to apply for the banking license, according to the report.

Jeremy Allaire, Circle’s CEO, was quoted as saying in an interview:

“To hold reserves with the Federal Reserve, … to directly settle with other banks in other markets around the world through those networks – that can improve the efficiency of what we deliver, it can reduce the costs.”

He added that the firm would also provide regulators with a “great guinea pig” in explorations of regulatory frameworks as Wall Street giants move closer to adopting cryptocurrency.

The ambitious move would seem to align well with Circle’s notable aim, as reported by CoinDesk in October 2017, to eventually offer a wide range of digital assets.

“I think what we would be comfortable saying is that digital assets – which are not just digital currencies, but a broader range of assets – it’s an area that has grown a lot, but that’s not easily accessible to mainstream investors,” Allaire told CoinDesk at the time.

Further supporting that aim, Circle acquired the Poloniex exchange in February to build an exchange service that will ultimately offer a host of cryptocurrencies. Sources suggested at the time that the firm put down roughly $400 million for the deal.

Investors are also seeing potential in the firm’s widening scope, with Circle closing a $110 million Series E fundraising round in May. Led by China-based mining firm Bitmain, the round saw participation from Accel, Blockchain Capital, Breyer, Digital Currency Group, General Catalyst, IDG, Pantera and Tusk Ventures.

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Barclays Is Talking to Clients About Opening a Crypto Trading Desk

Barclays, the second-largest bank in the U.K. by assets, is weighing the launch of a cryptocurrency trading desk.

A person with knowledge of the process told CoinDesk on Monday that the bank is gauging how interested clients of the bank would be in a crypto-specific trading desk. Bloomberg was the first to report that Barclays is talking to clients about cryptocurrency trading on Monday.

As it stands, the bank doesn’t have any concrete plans to begin trading cryptocurrencies, the person said, adding that the majority of – if not all – major banks are likely to be exploring that option. The person added that Barclays is considering whether to extend the trade offering to its entire suite of clients, including institutions and hedge funds.

When reached for comment, Barclays spokesman Andrew Smith told CoinDesk:

“Barclays has no plans at this time to build a cryptocurrency trading desk. We constantly monitor developments in the digital currency space and will continue to have a dialog with our clients on their needs and intentions in this market going forward.”

Other banks have reportedly been weighing a similar launch, most notably Goldman Sachs, which was the subject of speculation back in December. Yet weeks later, CEO Lloyd Blankfein shot down the rumor, though he left the door open to opening a crypto-focused trading desk during remarks in January.

Hedge funds are increasingly interested in trading cryptocurrencies, providing a growing client base for investments banks carrying out cryptocurrency trading.

Around 245 crypto-focused funds are currently operating, according to data provided by Autonomous Research. Despite an intense drawdown in cryptocurrency prices, only around nine of these funds have reportedly closed.

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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.

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Riot Blockchain Acquires Futures Brokerage After Crypto Pivot

Riot Blockchain Inc. recently acquired the Miami-based Logical Brokerage Corp., a registered futures broker, according to a Tuesday filing with the U.S. Securities and Exchange Commission.

According to the document, the former biotech company which recently pivoted to cryptocurrency, acquired 92.5 percent of the brokerage and “intends to investigate launching a digital currency exchange and a futures brokerage operation within the United States,” though it is unclear if or when such an exchange would launch.

The filing further stated that Riot Blockchain will begin announcing the results of its cryptocurrency mining operations with monthly reports. According to the document:

“…on or prior to April 17, 2018, and within 15 calendar days following the end of each calendar month thereafter for a six-month period, it will publicly announce its gross cryptocurrency production for the previous month. Initially the Company will release information for a six-month period and may discontinue such information release at any time.”

However, the filing also warned that Riot Blockchain has revenue streams in addition to its cryptocurrency miners, and that its miners may have a variable output depending on market volatility and how many of its machines are online at any given time. Therefore, the company said, its financial status cannot be determined based solely on the miners.

This acquisition may help boost Riot Blockchain’s reputation. Logical Brokerage, a member of the National Futures Association, is registered with the Commodity Futures Trading Commission. Critics had previously accused the company, formerly known as Bioptix Inc, of capitalizing on blockchain hype when the price of its stocks shot up from $8 a share to roughly $40 after its rebranding. Some shareholders have since filed three class action complaints, alleging the company violated securities laws.

The company presumably aims to launch bitcoin futures, which are already traded on two registered exchanges in the United States. Meanwhile, the CFTC is actively developing a new review process for further cryptocurrency futures products.

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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.

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TSX Group Subsidiary to Launch Cryptocurrency Brokerage

A wholly-owned subsidiary of Canada-based stock exchange operator TMX Group is launching a cryptocurrency brokerage.

TMX said Thursday that the subsidiary, Shorcan Digital Currency Network, had partnered with Paycase Financial on the initiative, which would focus on bitcoin and ether at launch, which is slated for the second quarter of 2018.

Paycase chief executive Joseph Weinberg called the brokerage “the first ever public crypto brokerage desk by an exchange,” saying the new partnership “represents the true institutionalization of cryptocurrencies as an asset class.”

He went on to say:

“Paycase’s partnership with the TMX solved a major problem in the blockchain ecosystem. With this partnership, we have built the first major bridge between the crypto world and the traditional financial markets.”

In additional statements, a representative for TMX Group framed the move as one aimed at providing new kinds of services to its client base, and is undoubtedly directly at tapping some of the demand for cryptocurrency buys within the Canadian market.

As new technologies continue to reshape the global financial industry, we continue to explore new ways to evolve our business to address client needs in both traditional and non-traditional markets,” John Lee, managing director of enterprise innovation and product development, said of the pending launch.

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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.