The popular cryptocurrency exchange platform, Coinbase is now launching a new incubator fund for early-stage start ups called Coinbase Ventures, the company announced Thursday.
Coinbase President and Chief Operating Officer Asiff Hirji said,
“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.”
Although the profits and margins from the fund will be “de minimis” (minimal) in the scope of the entire company but the fund is already off to a $15 million start and set to grow.
This week will mark the beginning of the fund’s seed-stage investments and will help companies and founders in the crypto and blockchain space get off the ground. It’s also meant to focus on building relationships within that ecosystem, he said.
“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 laid emphasis on the fact that Coinbase Ventures is searching for founders, not the next money-making cryptocurrency.
“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.”
Cryptocurrency exchanges are being scrutinized by the U.S. Securities and Exchange Commission this year. The SEC announced in March that it is looking to apply securities laws to everything from cryptocurrency exchanges to digital asset storage companies known as wallets.
One must also note how it will affect Coinbase, which is the leading U.S. marketplace for buying major cryptocurrencies. Its GDAX exchange for professional traders offers bitcoin, bitcoin cash, litecoin and ethereum.
Ripple which not yet on the exchange platform yet, would likely bring in many more buyers.
But the company is not adding any new cryptocurrencies at the moment but Hirji said as soon as there is more regulatory clarity, it will start listing more assets.
Meanwhile, Coinbase Ventures will not give preference to companies they invest in when it comes to choosing new cryptocurrencies for the platform, he said.
“We are not investing in currencies because we do not want even the appearance of a conflict of interest,” Hirji said.
The company also announced support for withdrawal of bitcoin “forks,” which are a method of giving holders of a certain coin free access to newly created coins. The company said in a separate blog post Thursday.
“This change will allow customers to more easily withdraw assets associated with Bitcoin Forks across all Coinbase products,”
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