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Quick Take

• Max Boonen hopes the acquisition will allow financial institutions to “tick the credit box” and start trading cryptocurrencies.
• The cash transaction leaves Boonen and co-founder Molendini as the only remaining shareholders apart from SBI Financial Services.
• B2c2’s employees will be subsumed by SBI, and the firm will continue to hire for its digital assets team.

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Alan Howard, billionaire hedger fund manager, is among the backers of a new institutional-focused investment firm that’s eyeing an as much as $1 billion allocation to bitcoin and ether by early next year.

According to a Bloomberg report, One River Asset Management CEO Eric Peters set up a new company to capture institutional interest in the two major cryptocurrencies. He told the publication that he’d bought “more than $600 million” in bitcoin and ether, a process that was completed in November.

Backing the One River Digital Asset Management is Alan Howard, a co-founder of Brevan Howard Asset Management. 

Per the report:

“Howard is playing a number of supporting roles. In addition to investing in One River Digital’s funds, he’s also buying a stake in the business. A company he controls, Elwood Asset Management, is providing One River Digital with trading services, market analysis and technical support.”

Notably, Ruffer LLP — the British investment manager that confirmed Wednesday it had obtained exposure to bitcoin worth north of $700 million — is also backing One River. 

“Ruffer portfolios aim to preserve capital and deliver good all-weather returns, and they now have an allocation to bitcoin to help us meet that objective,” a spokesperson for Ruffers told The Block in an email. “In November, Ruffer gained exposure to bitcoin via a specialist third-party manager. This was primarily a protective move for portfolios. It diversifies Ruffer portfolios’ investments in gold and inflation-linked bonds, and it acts as a hedge to some of the risks that we see in a fragile monetary system and distorted financial markets.

It’s not immediately clear the connection between this week’s Ruffer announcement, its stated exposure allocation, and its backing of the One River firm. When reached for follow-up comment, the spokesperson declined to clarify whether Ruffer had purchased bitcoin or financial products tied to its price.

According to Peters, “[t]here is going to be a generational allocation to this new asset class.”

© 2020 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.

TrueUSD is set to become the first US dollar-backed stablecoin to launch on the Avalanche blockchain.

The hope is that the integration, planned for the first quarter of 2021, will lead to improved use cases for stablecoins in payments as well as in DeFi applications, upping the speed and lowering the cost of transactions.

“US dollar liquidity is vital to thriving DeFi ecosystems, and we’re excited to bring one of the most trusted and widely-used stablecoins onto Avalanche,” says John Wu, president of Ava Labs.

TrueUSD, one of the five largest fiat-backed stablecoins by market capitalisation, is one of a number of stablecoins developed by TrustToken.

The firm also offers cryptocurrencies backed by pound sterling, the Hong Kong dollar, the Canadian dollar and the Australian dollar. Collectively, these currencies trade on over 100 exchanges and OTC desks.

Avalanche is an open-source platform specialising in hosting DeFi applications and enterprise blockchain solutions, and which stresses its scalability and interoperability.

In launching TrueUSD on Avalanche, TrustToken said it hoped to attract users in needs of low-latency for activities such as high-frequency trading.

Commenting on the launch of further stablecoins on Avalanche, Ava Labs president John Wu said the firm is “in final discussions with multiple other top-five USD stablecoin by market cap to launch natively on Avalanche”.

“We’ll also be onboarding additional stablecoins representing other fiat currencies, and algorithmic stablecoins to ensure DeFi users on Avalanche have flexibility and liquidity across all applications,” he told The Block.

© 2020 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.

Kraken has announced that it is putting together a team that will focus on integrating Bitcoin’s Lightning Network with the exchange.

The Lightning Network is meant to provide an accessible way for users to quickly and reliably engage in off-chain payments by adding another transaction layer above the Bitcoin blockchain. Users can create payment channels on this layer between parties.

Bitcoin’s popularity can cause network congestion and high transaction fees, particularly during bull markets. According to Kraken Bitcoin strategist Pierre Rochard, Lightning technology solves this problem by using the bitcoin blockchain more efficiently. 

According to Rochard, the dedicated Lightning team will go through several iterations to integrate Kraken with the Lightning Network. In the first iteration, the team will focus on withdrawals.

By 2021, the team will launch the ability to withdraw using the Lightning Network instantly and for a lower fee. An iteration for making deposits more efficiently will follow. After this, the team will evaluate user feedback and decide what else to prioritize, Rochard said. 

“We’re continuously investing in improving technology whether in-house or within the wider ecosystem,” Rochard told The Block. “Ultimately, this is about Kraken’s mission to accelerate Bitcoin adoption. We want to work with other exchanges to advance this technology and grow this network.”

© 2020 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.

CME Group will list an Ethereum (ETH) futures product next year, the firm said Wednesday.

CME Group, which gate-crashed the crypto derivatives world with a bitcoin futures contract at the height of the 2017 cycle, said on Wednesday — as bitcoin topped $20,000 that it would launch futures tied to Ethereum.

The product is coming to market February 8.

“Building on the success of Bitcoin futures and options, CME Group will add Ether futures to the cryptocurrency risk-management solutions available to trade in February,” the firm said.

Since 2017, CME Group has built a sizable market for bitcoin futures. As per data from The Block, open interest in its bitcoin futures contract stood at over $1 billion at last check—making it one of the larger futures markets in crypto. As noted by my colleague Ryan Todd, CME’s bitcoin futures market is a good proxy for institutional interest in bitcoin given firm’s can link up to the market much in the same way as they can to CME’s products in traditional derivatives. 

At the beginning of 2020, the firm launched its bitcoin options product.

© 2020 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.

Bitcoin’s price has surged above $20,000.

The price of the biggest cryptocurrency by market capitalization jumped above the $20,000 market on Wednesday, and at press time is trading hands above $20,100 on Coinbase. Per trading view, prices on that market hit a high of $20,420 during the surge.

The development saw bitcoin break above its previous all-time high, which took place at the start of December.

© 2020 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.

SRIW Group, a Belgian sovereign wealth fund that manages about $4 billion worth of assets, has invested in blockchain venture firm Tioga Capital.

Tioga announced the news on Wednesday, saying that it has raised $17 million for its first round of funding, and SRIW backed the round. Tioga did not disclose how much SRIW invested, but managing director Michiel Lescrauwaet told The Block that the sovereign fund is “one of the bigger investors” in the round.

Lescrauwaet previously managed Adamant Capital, a bitcoin fund that he set up with Tuur Demeester. Adamant quietly shut down late last year for “personal & family reasons,” as The Block reported in August.

Lescrauwaet set up Tioga earlier this year to specifically invest in blockchain startups. Besides SRIW, Belgian family offices such as Van Hool and Vlerick and other local tech entrepreneurs also participated in Tioga’s first funding round.

As for SRIW, the fund invested in Tioga through its W.IN.G (Wallonia Innovation and Growth) unit. W.IN.G is already an investor in two blockchain startups — CVTrust and Be Blockchain, its managing partner Nicolas D’Haene told The Block.

“We believe strongly in the blockchain technology’s potential for transformation across many industries,” said D’Haene. “We also believe Wallonia offers, through its rich biotech and logistics ecosystems, ideal opportunities for blockchain entrepreneurs.”

European focus

Tioga, headquartered in Belgium, is focused on investing in European blockchain startups.

Lescrauwaet told The Block that there are about 2,000 blockchain-focused startups in Europe, mainly in Zug, Zurich, Frankfurt, London, and Berlin. “But there is a big dislocation in the market,” he said. “There is no VC funding ecosystem to support European startups in the same way as there is in the U.S. That’s why we see a lot of value for European startups and their valuations are more attractive.”

Tioga will invest in those startups that have already received “some real initial traction” for their products and services, said Lescrauwaet. The firm will mainly join startups’ seed and Series A rounds, with an average investment of $1 million, said Lescrauwaet.

Tioga is registered with Luxembourg financial regulator CSSF. That is “very different” from a firm that is registered in the Cayman Islands or “some exotic area,” Patrick Van de Mosselaer, managing director at Tioga, told The Block. “For SRIW, for instance, investing in the Cayman Islands-based firms would be a total no go obviously,” he said.

Looking ahead, Tioga plans to raise another $33 million by the end of 2021, taking the total funding to $50 million, said Lescrauwaet.

© 2020 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

• ‘Fiat Freeway’ is a weekly column providing the latest updates on central bank digital currencies (CBDCs) and stablecoins. 
• This week’s column focuses on the latest influx of applications by digital asset firms seeking to obtain banking licenses, which is likely a reaction to authorities’ recent actions.

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Quick Take

• MakerDAO is one of the oldest successful DAOs on Ethereum with functioning governance.
• Anyone can participate in off-chain governance, while for governance polling, it is necessary to hold MKR.
• Executive voting, in turn, requires locking tokens in the governance contract.
• Despite the 9x growth of TVL, governance at MakerDAO continues to be relatively centralized and passive.

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The U.K.’s Financial Conduct Authority (FCA) has just announced a “temporary registration regime” for existing crypto businesses.

The new regime lets crypto firms that have applied for registration to continue operating until July 9, 2021. The previous deadline was January 10 of that year.

“The Temporary Registration Regime is for existing cryptoasset businesses which have applied for registration before 16 December 2020, and whose applications are still being assessed,” said the FCA. “This is to enable those existing businesses to continue to trade after 9 January 2021 until 9 July 2021, pending the FCA’s determination of their application.”

The regulator said it is extending the deadline as it could not assess and register all firms that have applied for registration “due to the complexity and standard of the applications received, and the pandemic restricting the FCA’s ability to visit firms as planned.”

This is a breaking story and will be updated

© 2020 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.