Week Ending 09.14.2018

 

“MANY NEW AND UNEXPECTED TRENDS HAVE EMERGED”

SECURITIES LITIGATION HITS ALL-TIME HIGH DRIVEN BY CRYPTOCURRENCY & BLOCKCHAIN CASES AND MORE ↓

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MERGERS AND ACQUISITIONS

Ideanomics (formerly called Seven Stars Cloud), the New York City-based AI and blockchain services firm, said it acquired FinTalk, the secure messaging service, and is taking a 10% stake in Asia Times, the news service. Terms weren’t disclosed. Ideanomics also said it has entered into a share swap with Liberty Biopharma, which is changing its name to HooXi. The specific details of the swap were not disclosed.

Ideanomics also announced a USD 6bn financing deal as well as a new co-CEO and other hires. (See Funding section and People section).

Graph Blockchain, the Toronto, Canada-based unit of Datametrex AI, said shareholders approved a reverse merger with Reg Technologies. Graph is also planning to raise USD 4m in a private placement of up to 13.3m at USD 0.30 each. Datametrex operates AI and blockchain businesses.

Datametrex unit Ronin Blockchain, a cryptocurrency mining firm, acquired Toronto’s Cluny Capital for USD 19.2m in a reverse merger in July.

VITAHUB, the Tornonto, Canada-based healthcare company using blockchain, said it is acquiring Roxy Software, the data management software firm, for USD 520,925 in cash and shares.


FILINGS

There were no new filings in the areas we track this week.


FUNDING

HUTN, the Springfield, Ohio-based parent of financial services firm EF Hutton, said it and its subsidiaries plan to raise USD 60m from cryptocurrency sales. A white paper will be release later in the fall. EF Hutton later said it plans to open a cryptocurrency exchange. 

Cocos2D-x, the San Francisco-based blockchain game developer, said it raised USD 40m from investors including Binance Labs, a fund run by Malta-based cryptocurrency trading platform Binance. 

HEX Innovation, the Hong Kong, China-based blockchain company focused on healthcare, said it scrapped the public side of an upsized initial coin offering after a pre-sale, launched September 1, was more successful than anticipated. 

The company is now selling 100,000 ethereum, or 20,000 more than the original 80,000, which were valued at USD 22m when the deal was announced in August. The original pre-sale planned to raise a tenth of that number.

India Globalization Capital, the Bethesda, Maryland-based cannabis company, said it raised USD 1m in a private placement. The company recently announced a blockchain initiative for payments.

XResearch, the New York City-based blockchain research and media company, said it plans to sell a 5% stake through an initial coin offering in the fourth quarter of this year. 

Nodle.io, the San Francisco, California-based blockchain company, said it raised USD 1.5m in a seed round led by Blockchange Ventures. The company is developing blockchain technology to allow devices to communicate directly. 

Other deals included Kinesis, Real Investment, Petroteq, and Protect Pharmaceuticals.

And Ideanomics (formerly called Seven Stars Cloud), the New York City-based AI and blockchain services firm, said it is planning a USD 6bn funding program with China’s First Auto Loan. The deals will mostly back electric vehicle upgrades for ride share companies mandated by the Chinese government.

The company also announced a new co-CEO and an acquisition. (See People section and Mergers and Acquisitions section).


LEGAL & REGULATORY

Crypto Asset Management, the La Jolla, California-based hedge fund focused on initial coin offerings, and Timothy Enneking, managing director, agreed to a USD 250,000 fine after falsely claiming they were a regulated fund, according to a US Securities and Exchange Commission statement

TokenLot, the Birmingham, Michigan-based financial service firm, Lenny Kugel and Eli Lewitt agreed to a give up USD 479,000 in profit they made after being charged with acting as a unregistered broker-dealer for initial coin offerings, the US Securities and Exchange Commission said in a statement. Kugel and Lewitt were barred from the investment industry for three years. TokenLot shut down in July.

Securities litigation has hit an all time high driven, in part, by cryptocurrency and blockchain related cases, according to a report by LexisNexis unit Lex Machina.

US Securities and Exchange Commissioner Hester Peirce outlines her objections to the commission’s ruling against an exchange traded cryptocurrency fund.


PEOPLE

Ideanomics (formerly called Seven Stars Cloud), the New York City-based AI and blockchain services firm, said it hired Brett McGonegal as co-CEO, Uwe Parpart as chief strategy officer and Evan Kalimtgis as chief investment officer. 

McGonegal is the former CEO of Hong Kong-based investment bank Reorient Group, which was acquired by Jack Ma, the founder of Alibaba. Bruno Wu is also co-CEO and president.

Parpart is the chairman of the news service Asia Times and a former Bank of America currency strategist. Kalimtgis has worked at JP Morgan and Glencore, the Swiss-based commodities trader.

The company announced the acquisition of marketing platform Grapevine Logic last week. Terms weren’t disclosed.

In late August the company said shareholders, which include Sun Seven Stars Investment and Hong Kong Guoyuan Group Capital, may raise USD 111m from the sale of 37.7m shares they hold in the company. It originally filed in April. In June, Richard Frankel was hired as CEO at its digital advisory services subsidiary, Red Rock Global Capital. At the same time Manuel Ron was hired as COO. 

The company also announced a USD 6bn financing deal and an acquisition. (See Funding section and Mergers and Acquisitions section).

Coinme, the Seattle, Washington-based company operating cryptocurrency ATM machines, said it hired Chris Roling as CFO. Roling joins from EY, where he was in charge of mergers and acquisitions and private equity in the Asia-Pacific region. Roling replaces Steve Olsen.  

Lampix, the New York City-based AR company using blockchain, said it hired Salvatore Buccellato as chief revenue officer. Buccellato was the founder and CEO of Gallant Capital.

Grant Thorton, the Iselin, New Jersey-based consultancy, said it hired JT Kostman as managing director of applied artificial intelligence. The role also includes a blockchain component. Kostman was the chief data officer for media giant Time and the chief data scientist for South Korea’s Samsung.

Boardwalktech Software, the Cupertino, California-based blockchain services firm, said director Michael Braun has resigned for personal reasons.

Phoenix Finance, the Shanghai, China-based financial technology company, said it hired Jason Jones as blockchain global strategic advisor. Jones is the cofounder of Lendit, the fintech conference organizer.

BX3 Capital, the New York City-based blockchain and cryptocurrency business advisory firm, has made Mike Minihan a partner and hired Jay Arcata as vice president of client operations. Minihan has worked at the US Internal Revenue Service, KPMG and PwC. Arcata was a partner at law firm Halloran Sage.

AlphaPoint, the New York City-based blockchain services firm, said it appointed Mosihe Gubin to its board of directors. Gubin is chairman of OptimumBank and CEO of both Strawberry Fields REIT and United Rx.

In August the company appointed Fisher Cataliotti partner Katya Fisher to the board. The law firm is focused on blockchain, cybersecurity, cryptocurrency and artificial intelligence. The same month it hired Ned Myers as head of product to run the company’s marketing efforts, and Srikant Manda as chief information security officer.

Myers joins from Black Knight, where he ran the capital markets and government businesses in the data and analytics division. Manda previously led security architecture and engineering teams at Juniper Networks and Fortinet. 

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 Ricoh executive James Whelan as chief technology officer and former Nasdaq executive Michael Schmidt as chief human resources officer. It also raised USD 15m in a Series A from Galaxy Digital Ventures in June.

Other hiring included Muirfield Investment Partners, Squire Mining, Aurora Labs and Generation NEXT Franchise Brands 


DATA

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


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