Goldman Sachs-backed Circle buys SeedInvest

Goldman Sachs-backed cryptocurrency company Circle is now the proud owner of an equity crowdfunding platform. The firm has reportedly purchased SeedInvest as part of its plan to become a complete blockchain-based financial company.

Circle reportedly acquired SeedInvest last week, according to an announcement on the company’s website. The acquisition is seen as a strategic move by the company, which also bought Poloniex earlier this year, toward a loftier goal of being a central hub for any type of crypto activity. Circle has also launched its own stablecoin, the US Dollar coin, as part of that plan.

Circle indicated, “The SeedInvest product includes many of the end-to-end capabilities needed for executing regulated crowdfunding, including startup due diligence, securities issuance, investor accreditation, payments and securities custody, as well as a broad range of innovative tools for startups to market their crowdfunding offerings online in a compliant fashion. With the merger and approval from key regulators, these capabilities will be expanded to support crypto-denominated investments including using fiat stablecoins such as USDC, as well as issuing and offering tokenized securities.”

Jeremy Allaire, the company’s CEO, expects that there will be a huge migration toward blockchain technology by all financial institutions within the next couple of years. He told CNBC in an interview recently that, “if we zoom out, there’s going to be this tokenization of everything.” He further predicts that “eventually these marketplaces will have tens of thousands, if not hundreds of thousands of assets — so the next piece was a broker dealer.”

SeedInvest CEO Ryan Feit asserts that the platform’s strategy is similar to that of blockchain startups looking for funds. He said of the crowdfunding platform, “we’re chasing a similar vision of changing the way businesses raise capital. It’s a different form of enabling companies to raise money, and another form of alternative assets for investors.”

The acquisition of SeedInvest is only in its early stage. In its announcement, Circle indicates that it has signed a definite agreement to buy the company, but adds, “This acquisition and planned new offerings are subject to FINRA [Financial Regulatory Authority] approval.”

New York-based SeedInvest is reportedly the largest equity crowdfunding platform in the US. It has a network of more than 200,000 investors and has generated “triple-digit annual revenue growth.” In its “Inc. 500 List,” Inc. Magazine ranks the company as the fourth fastest-growing financial services firm in the US.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Circle announces new US dollar-pegged crypto, the USD Coin

Cryptocurrency wallet service and investment startup Circle has created a new cryptocurrency—the USD Coin (USDC)—which is pegged to the US dollar and backed up by physical reserves of fiat held by company.

The Goldman Sachs-backed company’s stablecoin allows the tokenization of physical currency, in a bid to serve cross-border transactions with fast settlement on a blockchain. Crucially, because the USD Coin is pegged to and matched by U.S. dollars on a one-for-one basis, its value is designed to remain stable—an important feature for institutional actors.

In a statement, Circle co-founders Jeremy Allaire and Sean Neville said that USDC would help the firm realise its vision of the future of international transactions.

“Just as HTTPS, SMTP and SIP enabled free borderless information sharing and communications, crypto assets and blockchain technology will enable us to exchange value and transact with one another in a similar way: instantly, globally, securely and at low cost,” according to the Circle executives.

Initially previewed back in May, the project has gone on to raise capital at a valuation of $3 billion, following a Series E funding round led by mining group Bitmain.

The stablecoin is distinct from other similar projects in that multiple issuers will be supported, through an open source consortium called CENTRE.

Issuers are required to hold relevant licensing and regulatory approval, but the model will allow for decentralised control of issuing USDC through consortium members.

Some 30 partners have agreed to work with the project from launch, including merchant payment service BitPay. Commenting on the project, BitPay CEO Stephen Pair said they were fully behind CENTRE and the USDC.

“BitPay has always been supportive of open source crypto communities and blockchain initiatives and likes the direction CENTRE is taking with USDC,” Pair said. “We envision a future where all digital assets and payments live on the blockchain.”

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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