Coinsource in funding talks for international expansion
COINSOURCE IN FUNDING TALKS FOR INTERNATIONAL EXPANSION
Coinsource, the Fort Worth, Texas-based cryptocurrency automated teller machine firm, has started talks for a funding round that will fuel its international expansion, according to General Counsel Arnold Spencer.
The talks, which include both financial and strategic firms, surround a deal of as little as a few million dollars but the possibility of a much larger transaction is also on the table. “I don’t want to put a ceiling on it,” Spencer said.
The financing round may close by the first quarter of next year.
Puerto Rico is likely to be the first step overseas, where the company plans to put its first machines in place in the next 60 days. A total of 10 to 15 machines are planned there, Spencer said. Japan and Argentina are expected to follow.
The company is also hard at work on domestic US expansion as well, and plans to have at least 400 machines in place by the end of 2019. That’s double the number at the end of last year. It also would like to have machines in each of the 50 states by the end of next year, Spencer said. It currently operates in 25 states and Alabama is among the most likely next states for the company’s automated teller machines.
Domestic expansion entails running up against the more difficult to please state regulators, although the company scored a major success in New York last month, arguably the most difficult regulator to gain approval from.
Expansion comes at a troubled time for the cryptocurrency industry as the value of digital currencies have plunged this year.
Investors and market watchers have looked to a variety of reasons for the fall including a dispute over control of Bitcoin, the largest cryptocurrency, heavier regulatory oversight in the US, costs and old-fashioned bubble fears. Regardless, transactions across the entire industry, including cryptocurrency machines and beyond, have fallen as much as 80%.
All the same Coinsource has seen “sustained demand” and been able to expand into new markets despite the turmoil, Spencer said.
The company provides a complete suite of services to those that rent their machines, including armed guards to pickup and drop off cash. The company doesn’t sell the teller machines outright to more easily maintain compliance with regulations, particularly anti money laundering laws.
Spencer declined to discuss how much the company specifically charged for rent or the fees they earn. Commissions can go as high as 20%, he said, and a company can be profitable at 6% to 10%, a level he still considered high.
Other initiatives the company is working on include rolling out services for more cryptocurrencies beyond Bitcoin and remittances.