Crypto Hedge-Fund Bubble to Deflate, Bloomberg Thinks

According to Bloomberg, at least nine funds have been shuttered so far this year and funds have losses of 23 percent in 2018, industry tracker says
03 April 2018   491

In 2017 on the background of an impressive price jump of bitcoin, more than 150 hedge funds were launched, thanks to which many institutional and private investors paid attention to cryptocurrencies. However, since December the bitcoin rate has more than halved, forcing investors to start thinking twice before placing their funds in similar enterprises, Bloomberg writes.

New capital has slowed, even for a higher-profile fund like ours.

Kyle Samani

Co-founder of Multicoin Capital

 This fund was launched in August last year and has about $ 50 million under management.

At the same time, such a noticeable decrease in the price of bitcoin and other cryptocurrencies resulted in at least nine funds, including Crowd Crypto Fund and Alpha Protocol, are stopping their work, removing websites and accounts from social networks.

Considering the potential regulatory and market risks, AlphaProtocol has decided that the best approach is to refund the private sale contributors.

Alpha Protocol Team

Polychain Capital, as of September 2017, is probably the largest cryptocurrency hedge fund with about $ 250 million under management, in January, decided to refuse to enter the stock exchange in Canada. Even earlier, in December, billionaire Mike Novogratz refused plans to launch a crypto fund, directing efforts to create a trading crypto-currency bank and investments in related technologies. 

According to Lex Sokolin, director of financial engineering at Autonomous Research, until the end of 2018, up to 10% of all crypto funds may be terminated, while Rick Marini from Protocol Ventures believes that only 50 funds will be able to attract sufficient external capital to lead sustainable business. The remaining funds, he said, will have problems.

Nevertheless, even against the background of lower prices, optimists are still present. In particular, they see the potential in the blockchain techology, as well as in such crypto-currencies as Ethereum, Ripple and Litecoin.

According to Marini, now he receives on average three pitches from new crypto-currency funds. He usually meets representatives of two of them, but he plans to invest only in one or two in 2018.

Binance to Join Forces With IdentityMind

IdentityMind provides exchanges with ability to comply with KYC\AML worldwide
26 March 2019   79

Binance announced an agreement with IdentityMind, which will help it ensure compliance with regulatory requirements and improve data security.

IdentityMind provides cryptocurrency exchanges with access to the platform, thanks to which they can monitor compliance with customer identification and anti-money laundering requirements in real time. This includes connecting new customers, managing their profiles and monitoring transactions.

The partnership between Binance and IdentityMind further strengthens our compliance capabilities and our commitment to re-invest in the blockchain ecosystem and grow it. We continue to evolve and enhance security systems while adhering to regulatory mandates in the countries we operate in. The goal is to foster greater trust among financial institutions worldwide.

Samuel Lim

Chief Compliance Officer, Binance

Last year, Bloomberg wrote about the Binance user identification system as the least strict in the entire industry, and linked the “level of anonymity” provided by the exchange with the risks of money laundering and market manipulation.

In October, Binance entered into an agreement with a supplier of transaction analysis software on the blockchains Chainalysis, and in November with Refinitiv, which developed an automated solution for client verification.

Whether the ordinary users of the platform will feel the impact of the integration of IdentityMind tools on themselves, the exchange does not specify.