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Crypto firm BitGo has hired former Coinbase compliance chief Jeff Horowitz as it seeks a trust charter from New York state regulators.

Horowitz joined BitGo earlier this month and replaces Matt Parrella, who left the firm in November, according to his LinkedIn. Horowitz will head BitGo’s compliance and risk programs.

Last August, BitGo applied for a trust charter from the New York State Department of Financial Services (NYDFS), and Horowitz would help the company win the charter, he told the Wall Street Journal.

BitGo currently offers custodial services through a South Dakota trust charter. The company is exploring potential licenses in other jurisdictions, both in the U.S. and abroad, said Horowitz.

BitGo last month settled a case with the U.S. Treasury Department for apparent violations of sanctions programs. The Treasury’s Office of Foreign Assets Control said BitGo failed to prevent users located in sanctioned countries from using its wallet services, despite tracking their IP addresses. The firm agreed to pay $98,830 to settle the potential civil liability.

“As we move into the new year, we will see greater regulatory clarity for digital assets both here and abroad. Jeff’s knowledge of both traditional financial services and crypto markets will be critically important as we navigate state, federal, and international policies and regulations,” said Mike Belshe, CEO of BitGo.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

BC Group, the Hong Kong listed company that operates the crypto exchange OSL, has completed the issuance of new stocks.

In a public disclosure on Wednesday, BC Group said it issued 45 million new shares at a subscription price of HK$15.5 on January 13, which in total is worth HK$697 million, or $90 million.

The transaction follows an announcement made by BC Group on January 6 where the firm said it entered an agreement with a stock placing agent in order to issue the 45 million new shares.

BC Group said it plans to use the net proceeds from the raise to maintain and expand OSL’s trading platform and digital asset services.

In particular, the firm said it would allocate about HK$225 million, or $30 million, for “maintaining sufficient liquid capital to satisfy SFC [Securities and Futures Commission] license requirement of the licensed entity and the expansion of prime brokerage business.”

BC Group said on December 15 that OSL was granted the license by the Hong Kong financial watchdog to operate a regulated brokerage and automated trading service for crypto assets in Hong Kong. 

The firm didn’t break down the names of the institutions that invested in the latest round. But according to a January 11 disclosure, Fidelity International, a spin-off from the U.S. financial services giant Fidelity Investments, increased its ownership of BC Group on January 6 by another 3.37 million shares – also at a subscription price of HK$15.5.

The transaction is worth about HK$52 million, or $6.7 million, and follows Fidelity International’s previous $14 million investment into BC Group in February 2020. 

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Quick Take

• Reflex indexes are meant to be a more stable representation of a collateral asset (e.g. ETH) without losing its trust-minimized properties
• Reflexer Labs raised $1.7 million in August led by Paradigm, with participation from Robert Leshner, Standard Crypto, and Variant Fund
• In October, Reflexer launched the initial and unaudited version of their protocol — this is now being shut down with a full mainnet launch expected in Q1 2021

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Quick Take

• ‘Fiat Freeway’ is a weekly column providing the latest updates on central bank digital currencies (CBDCs) and stablecoins. 
• This week’s column examines the most recent interpretive letter on digital assets from the U.S. Office of the Comptroller of the Currency’s (OCC).

This research piece is available to
members of The Block Genesis.
You can continue reading
this Genesis research on The Block.