VC Firm Behind Snapchat Takes Aim at Crypto Investments

Lightspeed logo

Tech journal Recode reported last May 17th that the venture capital firm that helped launch Snapchat is looking at ways to increase their investment profile in the crypto industry.

Aaron Batalion, a partner at venture capital firm Lightspeed, is reportedly leading an effort to boost crypto investments for the firm. The initiative is to explore three possible methods: setting up a new fund, carving out a portion of an existing fund, or launching an entirely new project, Recode reported, citing “sources”.

According to Recode’s report, Lightspeed is more inclined toward carving out part of an already existing fund for crypto investments rather than setting up a new fund, something they have been considering over the past months.

Recode added that Batalion may not want to wait and is reportedly considering leaving the firm to launch his own crypto-focused project. Citing a source close to Batalion, Recode reports that Lightspeed is prepared to financially back the new potential project.

Batalion is far from the only partner at Lightspeed interested in crypto. Jeremy Liew, who led the push to invest in Snapchat and a bullish bitcoin supporter, was part of Lightspeed’s backing of Blockchain.com’s initial funding back in 2014

Lightspeed’s interest in crypto is shared by other traditional VC firms. Comcast Ventures and the Rockefeller family’s venture capital arm Venrock are reportedly making their own moves into the crypto space.

London-based Institutional Crypto Exchange By LMAX, The First In The World

LMAX Exchange

Fintech firm LMAX Exchange Group will be launching LMAX Digital, the first institutional cryptocurrency exchange which will let institutional investors trade Bitcoin, Bitcoin Cash, Litcoin, Ethereum and Ripple, five of the most established cryptocurrencies with the highest level of liquidity.

The move symbolizes the recognition of the crypto trade by the financial institutions as a legitimate industry, a long-awaited triumph of crypto enthusiasts who struggled with the stigma.

LMAX Exchange’s CEO, David Mercer, said: “The rise of institutional trading of crypto currencies will be a game-changer for the industry. We believe our new exchange will support the transformation of the crypto market from the fringes to the mainstream.”

The new exchange will be launched from LMAX’s data centre in London with plans of setting up in Tokyo and New York is being targeted in a few months.

Aside from the five top currencies, platform users of LMAX will also benefit from the public rulebook for all members, offer a full custodian solution and provide secure, multi-signature wallets offered by the company.

Looking to Issue an ICO? Look Outside the US

ICO around the globe

For ICO issuers, it’s starting to look better to set up shop outside the US.

In a market environment of uncertainty, where regulation is unsure and the United States Securities and Exchange Commission has started investigating ICOs, most issuers and stakeholders are finding other jurisdictions a more conducive place to launch their projects.

This was the hot topic over at Token Summit III in New York City.

Startup founders, attorneys and investors all had strong opinions about how far they can go in a market environment where regulators and enforcement agencies know how easy it is for malicious actors to take advantage of unwary investors and scam millions of dollars out of unwitting buyers.

“The reason there’s a thousand people here, it’s not blockchain technology,” Jason Fang of Sora Ventures said, noting that he’s been going to blockchain events for years and it was all the same people until the initial coin offering (ICO) boom. “The difference is money. The difference is speculation.”

However, not everyone felt that hype meant rushing would be the right approach.

For example, David Sacks, former Paypal COO and investor in Craft Ventures, spoke about how getting compliance just right led to Coinbase becoming “the first really successful company in the space.”

Sacks wasn’t the only person. Throughout the day, several speakers returned to the question of regulation, and from the stage it became clear that the rest of the world isn’t nearly as complicated as the U.S.

Securities laws in the U.S. are based around the Roaring ’20s, which led to the Great Depression, Lowell Ness of Perkins Coie explained during a panel on regulation,explaining that:

“Literally the securities law is intended to exclude the moms and pops from too risky investment.”

Other countries, however, have a more relaxed approach and this is luring some ICOs overseas.

While geography seemed a main concern for many ICO issuers, it isn’t the only kind of distance that could lower risk. Time could also serve a token issuer.

Several issuers are relieved that they had finished their token fundraisers before the ICO hype started.

All of this said, it is crystal clear that the ICO industry is keeping a wary eye on both the unclear guidelines throughout the world and the thought that regulators could create rules that make their businesses illegal at some point.

Speaking to the fear felt by many toward U.S. regulators, MME’s Thomas Linder said:

“The U.S. needs to learn that in a globalized, decentralized economy, they are not the center of the universe anymore.”

Colorado Law Proposes Accepting Crypto for Political Campaigns

Colorado Crypto Legislation

According to a report from local news group Denver Post last May 17th, Colorado politicians could soon accept Bitcoin or other cryptocurrencies as campaign contributions.

Colorado Secretary of State Wayne Williams made the proposal for allowing donations of cryptocurrencies in political campaigns in draft rules presented on May 16th, the Denver Post reported.

The Federal Election Commission (FEC) already approved acceptance of Bitcoin, categorizing it as in-kind donations for political campaigns, and gives the campaign 10 days to transfer the donated cryptocurrency into their campaign’s official depository.

According to the Denver Post, Colorado is most likely to follow the FEC’s designation of cryptocurrency as an in-kind donation. This would mean the donation could be returned or refunded back if the value of the donated cryptocurrency exceeds the aggregate limit.

While such donations may be convenient for the donor, Colorado’s deputy secretary of state Suzanne Staiert reportedly said, “[i]t’s going to be an accounting problem, potentially, for campaigns who want to use it.” However, Staiert also added that the “FEC is doing it now, so we are just going along for the ride.”

Colorado won’t be the first US state to go down this trail. New Hampshire actually began allowing candidates to accept contributions in cryptocurrency back in 2014.

Earlier this May, a piece of state legislation to create guidelines for identifying crypto tokens was voted down in the Colorado state Senate, in what some perceived as a blow to blockchain innovation in the state.