Coinbase, the largest cryptocurrency exchange in the United States, has announced an initiative to create a venture capital business – Coinbase Ventures, that will finance innovative crypto startups. The popular cryptocurrency exchange seems set to establish itself as a major player in Silicon Valley.
Coinbase Aims to Strengthen Relations Within the Crypto Ecosystem
Asiff Hirji, President and Chief Operating Officer of Coinbase, told CNBC “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.”
According to Hirji, the initial fund will hold $15 million USD and seed-stage investments are slated to commence this week. Coinbase Ventures will be a launching pad for crypto and blockchain projects. Moreover, Coinbase will be investing in projects that it could benefit from. Overall, the Coinbase Ventures fund is being established to build a healthy relationship with the crypto ecosystem.
Coinbase 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”
Coinbase Ventures Not Interested in Currencies
The San Francisco-based company stressed that it is not looking for the next big cryptocurrency, but innovative projects. The company does not want to invest in tokens and is cautious about avoiding even the appearance of a conflict of interest. Coinbase appears to have expansive aspirations in the wider crypto ecosystem.
However, the company has already been accused of insider trading during the bungled listing of Bitcoin Cash. Last month, a class action lawsuit was filed against the company in relation to those allegations. Recently, rumors have surfaced that Coinbase would add Ripple’s XRP, prompting wild price spikes.
Since the cryptocurrency boom of last year, several venture businesses have started, aiming to finance fintech and blockchain startups. However, the regulatory mood in the U.S. has left crypto enthusiasts in limbo. Recently, the U.S. Securities and Exchange Commission (SEC) hinted that it may introduce securities laws for cryptocurrency exchanges.
In separate news, Coinbase said that will allow users to withdraw funds that arise from forks of the Bitcoin network.
Will Coinbase benefit from its new venture arm? Let us know your views in the comments section.
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