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Crypto remittances are growing in Latin America, particularly in the wake of other remittance platforms shutting off access to some markets.

The number of crypto criminals using so-called privacy wallets to help hide their identities is on the rise, according to analytics firm Elliptic.

One of the most prominent crypto players in Latin American has raised $62 million to help fuel its expansion in the region. 

In a press release shared with The Block, Mexico-based Bitso said that it closed a $62 million Series B round, led by QED Investors and Kaszek Ventures. The round also included participation from Coinbase and Pantera Capital. The firm declined to share the valuation at which the raise was conducted, as well as recent revenue figures.  

In 2016, the firm raised $2.5 million in a Series A. At the time, the firm had only six employees and was valued at $10 million. The firm expanded its headcount from 80 to 200 employees over the past five months.

According to chief executive officer Daniel Vogel, the fresh injection of capital will allow the firm to build out its presence in Brazil. In an interview with The Block, Vogel said participants in the round see Brazil  as a strong growth opportunity for the firm. 

“Everything in Brazil is bigger than in Mexico,” he said. “Yet no exchange in Brazil is larger than Bitso is in Mexico. So [our investors] see a big opportunity replicating what we’ve done in Mexico and bringing that in Brazil.”

The exchange has some experience doing just that in Argentina, according to Vogel. Since its expansion into the market in February, Bitso has grown its market share to more than 75%. The expansion into Brazil could help the firm reach its goal of doubling its user base of 1 million in 2021, according to a spokesperson for the exchange. 

Bitso’s business extends beyond that of a traditional exchange business of matching buyers and sellers. It also has been expanding its reach in remittances and will soon launch additional financial services products, such as interest-bearing accounts and collateralized lending. In the long-run, Vogel said that he thinks the latter two business lines will drive revenue growth for the company. 

“The exchange business is one where trading fees continue to collapse,” he said. “In the long run, that is going to be a difficult business to monetize.”

As for remittances, the firm has facilitated more than $1 billion worth of remittances in the Mexican/US corridor since the beginning of the year, according to Vogel.

In February, Vogel told The Block the firm could make up 20% of the $35 billion US-to-Mexico remittance market by the end of 2020. Vogel said “Covid-19 slowed things down a bit.”

While the firm is likely to fall short of that goal, he said the introduction of U.S. dollar products to countries like Brazil and Argentina could be a “game-changing” development. 

“Even though the exchange business has been the largest one, financial services for retail and cross border — we believe in 2021 — will be the fastest growing,” he told The Block.

Disclosure: Pantera Capital is an investor in 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.

Latin American crypto exchange Bitso has raised a whopping $62 million funding round, the largest in the region for a digital asset firm.

“The adoption of bitcoin by institutional investors has only begun, while for gold, its adoption by institutional investors is very advanced,” a JPMorgan managing director wrote in the report.

The story is developing and will be updated with additional information.

The Block yesterday exclusively reported that France is set to implement stringent new measures for the country’s cryptocurrency sector.

The French Finance Ministry is preparing to not only harden know-your-customer (KYC) rules for crypto firms but also regulate crypto-to-crypto transactions, The Block reported citing three industry sources — Simon Polrot, president of French crypto association ADAN, Nicolas Louvet, CEO of Coinhouse Group, and Pierre-Guy Bareges, CTO of Digital Service Group.

Today, a source in the French Finance Ministry, with knowledge of the development, confirmed to The Block about the forthcoming stricter measures. They said, “an ordinance will be presented this week, followed by a decree by the end of this month, and all crypto firms will get six months to comply with rules.”

Within this timeframe, “additional measures will be implemented to support and simplify digital identification for crypto-assets users. This will therefore make the double KYC no longer necessary, only one will be required,” the source continued.

Yesterday, the industry sources told The Block that mandatory full KYC processes are coming for all crypto transactions, including crypto-to-crypto transactions, and that it would require two forms of government identification (ID). The ministry source now said only one ID will be needed.

As for the current KYC rules, the limit for such processes is €1,000, and at present, it applies only to crypto-to-fiat transactions.

The other major proposed rule change is a mandatory registration for crypto-to-crypto exchanges. Currently, in France, the mandatory registration rule is only for crypto-fiat exchanges and crypto custodians.

The ministry source also confirmed the main reason behind the upcoming measures — i.e., preventing terrorism financing through cryptocurrencies.

“What we are trying to do in France is to fight against the financing of terrorism through crypto-assets. But our overall goal remains to foster innovation through crypto-assets,” said the source. “We’ll carry both these messages at the EU level.”

The Finance Ministry hasn’t responded to The Block’s request for comment.

© 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.

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