Week Ending 08.17.2018

 

“A MEANINGFUL STEP TOWARDS THE FUTURE OF DECENTRALIZED APPS”

COINBASE BUYS DISTRIBUTED SYSTEMS AND MORE ↓

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MERGERS AND ACQUISITIONS

Coinbase, the San Francisco, California-based cryptocurrency trading platform, acquired Distributed Systems, which is building identity services for mobile wallets. In June, Coinbase acquired Keystone Capital, a broker dealer. Terms for the two transactions weren’t disclosed.

The company last week hired Amazon’s Tim Wagner as vice-president of its engineering unit while Facebook’s head of blockchain David Marcus resigned from the Coinbase board of directors as the social media giant deepens its engagement with the distributed ledger space. The week before Coinbase hired Jeff Horowitz as chief compliance officer. Horowitz was head of compliance at Pershing, a unit of custody, clearing and settlement firm BNY Mellon.

Valence, the Seattle, Washington-based business services firm, said it is acquiring AR/VR studio 8ninths. Valence focuses on new technology, including AI, robotics, AR/VR and blockchain.

GreenBox POS, the San Diego, California-based blockchain payments company, said it is acquiring payments processing firm Sky Mids Technologies. Terms weren’t disclosed.


FILINGS

Megalith Financial Acquisition, the New York City-based blank-check company planning to buy financial technology companies, refiled for a USD 150m initial public offering of 15m shares at USD 10.00 each. The company identified blockchain as one area of management expertise.

Other filings included Digitaltown


FUNDING

SFOX, the Palo Alto, California-based institutional cryptocurrency trading platform, said it raised USD 22.7m in a Series A led by Tribe Capital and Social Capital. Airbnb co-founder Nathan Blecharczyk and Blockchain Capital also participated.

Axoni, the New York City-based blockchain company, said it raised USD 32m in a Series B led by Goldman Sachs and Nyca Partners. Andreessen Horowitz, Citi, Franklin Templeton, JP Morgan and Wells Fargo also participated. The company has developed technology for the credit derivatives market.

Line, the Tokyo, Japan-based messaging app, said it formed a USD 10m blockchain investment fund called unblock ventures, which is based in Hong Kong.

Lambda, the Singapore-based blockchain data storage company, said it took an investment of unspecified size from Bitmain, the Beijing, China-based cryptocurrency mining equipment maker. Last week Lambda said it was raising up to USD 5m in a token crowdsale. At the same time Bitmain invested USD 3m in tribeOS, the Hamilton, Bermuda-based blockchain company focused on advertising. 

Bitmain is reportedly planning to soon file for an initial public offering. The company raised USD 400m in a pre-IPO financing led by Sequoia Capital, according to reports at the time. 

Team Inblock, the Hong Kong, China-based blockchain company, said the pre-sale for its Metacoin will run from August 20-31. The company didn’t say how much it plans to raise.

Pantera Capital, the San Francisco, California-based investment firm focused on blockchain, is raising USD 175m for a third fund, according to a TechCrunch report

Recent Pantera investments this newsletter has tracked include ODX, the Singapore-based blockchain-backed internet service provider, which raised USD 60m in July.

In spring, the fund also participated in a USD 110m funding round for Circle Internet Financial, the Boston-based mobile payments and cryptocurrency trading company. The company is launching a cryptocurrency pegged to the US dollar in an attempt to overcome the volatility that plagues the sector.

Huobi, the Singapore-based cryptocurrency exchange, said it has made an investment in OpenFinance Network, the US cryptocurrency trading platform. The companies didn’t announce deal terms. 

The company also invested in SharesPost, the San Francisco, California-based trading platform. SharesPost raised USD 15 million in a Series C in June led by LUN Partners and Kenetic Capital. Last week, it hired Nick Grabowsk as chief technology officer. Grabowski joins from Charles Schwab, where he was a vice-president of application architecture and R&D. He will work on integrating cryptocurrency and blockchain securities into the SharesPost platform, which started as a secondary trading venue for private technology firms.

In April, Huobi said it was forming a USD 1 billion fund to invest in blockchain startups.

Lucidity, the Los Angeles, California-based advertising services company using blockchain, said it raised USD 5m in a funding round that included 3Rodeo and CoinUs.

The Floor, the Tel Aviv, Israel-based financial technology firm, raised USD 5m from Fosun, the Chinese conglomerate. The Floor said in May it was developing a blockchain securities lending platform.

The DEXON Foundation, the New York City-based blockchain company, said it raised USD 20m in a private placement led by IDG Capital.

Swarm, the Palo Alto, California-based blockchain firm, said it started pre-funding its Robinhood Equity Token. The token will provide ownership in a private equity-like investment fund. Swarm didn’t say how much it planned to raise.

Overstock.com, the Salt Lake City, Utah-based online retailer, issued a clarification regarding a financing from Hong Kong-based GSR Capital for its blockchain subsidiary tZERO.

Last week Overstock said tZERO raised the amount of financing it was receiving from GSR to USD 404m. Overstock said in June tZERO was raising USD 160m.

Other deals included BEAN, Argentum 47, Blockchain Foundry, Sunstock, Reality Shares, RenGenLabs.com and Petroteq Energy

In other funding news, initial coin offerings may be behind the Ether crash, according to a Bloomberg report.

And blockchain needs more investment in protocols and fundamental infrastructure, the founder of Chinese venture capital fund Node Capital tells ZDNet.


LEGAL & REGULATORY

Riot Blockchain, the Castle Rock, Colorado-based company developing a cryptocurrency mining business, said it is under investigation from the US Securities and Exchange Commission. Coverage from CNBC here.

The SEC also said it permanently barred David T. Laurance from becoming an officer or director at a public company because of fraudulent claims made during the Tomahawk Exploration initial coin offering. CFO’s take is here.

South Korea’s finance minister Kim Dong-yeon confirmed plans for a KRW 5trn (USD 4.4bn) investment next year in sectors that include blockchain and AI, a 65% year on year jump, according to a CCN report.

At the same time, block chain associations are objecting to government moves to group cryptocurrency exchanges with entertainment and gambling firms instead of grouping them with startups and small and medium sized enterprises in an amendment to an existing venture capital law. Coindesk story is here.

Venezuelan President Nicolas Maduro said the country is preparing to link pensions to the Petro cryptocurrency, according to a Coindesk report. The Maduro government hatched the Petro in response to international sanctions aimed at freezing Venezuela out of international financial markets after a series of human right violations.

The US Senate Committee on Energy and Natural Resources is holding an August 21 hearing on blockchain’s effect on electricity markets. 

Tax and cryptocurrency confusion in the US, from Bloomberg

Quartz’s take on a new blockchain guide in China.


PEOPLE

SRAX, the Los Angeles, California-based marketing company, said it hired George Stella to run its packaged goods unit, SRAXshopper. His official title is vice president. Stella joins from Yieldbot, the digital advertising company. SRAX is developing a blockchain where consumers can sell access to their personal data. 

TEMCO, the Seoul, South Korea-based logistical supply chain company using blockchain, said it hired Gabriel Kurman as a social impact advisor. Kurman was the co-founder of RSK as well as CFO and head of investor relations at Koibanx, two blockchain companies.

Block One Capital, the Vancouver, Canada-based investment fund, said it hired machine learning specialist Sivakumar V. Arumugam as director of research. He is currently an affiliate with the department of philosophy of science at Cambridge University. In June Block One Capital acquired a 30% stake in Affirmation Technology, a blockchain services provider. 

Glance Technologies, the Vancouver, Canada-based mobile payments firm, said it hired Sascha Williams as COO. Previously, he was an advisor to the CEO. Glance says it is working on a rewards based cryptocurrency. 

AlphaPoint, the New York City-based blockchain services firm, said it hired Ned Myers as head of product, and he will be in charge of the company’s marketing efforts. Myers joins from Black Knight, where he ran the capital markets and government businesses in the data and analytics division.

The hire marks the fifth executive AlphaPoint has brought in since May. 

Last week, it hired Srikant Manda as chief information security officer. He previously led security architecture and engineering teams at Juniper Networks and Fortinet. The week before it appointed Fisher Cataliotti partner Katya Fisher to the board of directors. The law firm is focused on blockchain, cybersecurity, cryptocurrency and artificial intelligence.

AlphaPoint, which is developing corporate auditing software, hired Kristin Boggiano as chief legal officer in July. She was most recently senior regulatory counsel at Guggenheim Asset Management.

In June, the company hired former Nasdaq executive Michael Schmidt as chief human resources officer and raised USD 15m in a Series A from Galaxy Digital Ventures.

Monarch Blockchain, the Sacramento, California-based blockchain payments firm, said LinkedIn co-founder Eric Ly is joining its advisory board. 

Tracr, the blockchain being developed by London UK-based Anglo-American’s De Beers, said it hired Jim Duffy as general manager. Tracr didn’t provide the names of Duffy’s previous employers.

Conduent, the Florham Park, New Jersey-based business services company, said it hired Accenture’s Nikhil Nayab to head the company’s blockchain business.

Other hires included CRYPTO.com, MovieCoin and Vanstar Mining Resources 


DATA

No new sets of data were released in the areas we track this week


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