US exchange announces fund for startups
Leading US-based cryptocurrency exchange, Coinbase has announced a new investment fund to help crypto startups.
The new scheme is a vehicle for early-stage investments called Coinbase Ventures.
The company revealed they might even invest money into direct competitors.
The announcement was made by Coinbase President and Chief Operating Officer Asiff Hirji during CNBC’s “Fast Money” on Thursday.
“We’re going to invest off our balance sheet into crypto companies.
“We will invest in companies that are in the space and are aligned with our values.”
Hirji explained how profits from the fund would be “de minimis” in the scope of the entire firm.
The fund is already off to a healthy start with $15 million currently in the pot as a start and its set to grow.
The fund’s seed-stage investments will help companies and founders in the blockchain and crypto space get off the ground and will begin this week.
He added that the focus is on building relationships within the crypto ecosystem.
Coinbase could end up investing in its competitors in order to do that.
The San Francisco-based company said in a blog post:
“You may also see us invest in companies that ostensibly look competitive with Coinbase.
“We’re taking a long-term view of the space, and we believe that multiple approaches are healthy and good.”
Hirji emphasized that the idea behind Coinbase Ventures is to nurture founders, not find next money-making cryptocurrency, saying:
“By giving them access to capital we hope that they will grow great businesses.
“It’s not about investing in the token, it’s not about trying to line up tokens that we would put on our exchange.”
Coinbase is the most popular U.S. marketplace for buying leading cryptocurrencies.
Coinbase, Inc. also operates GDAX alongside its regular exchange.
It’s highly likely that adding a new coin to Coinbase would bring in many more buyers.
Rumors that the exchange would soon add Ripple’s XRP sent prices soaring earlier this year.
Hirji explained that the platform would not be adding any more cryptocurrencies until there is more regulatory clarity in the market.
He said it would start listing more assets as soon as regulation becomes clearer.
However, Coinbase Ventures will not give preference to startups they invest in when it comes to selecting new cryptocurrencies for the platform.
“We are not investing in currencies because we do not want even the appearance of a conflict of interest.”