Almost Half of ICO Funding Goes to Europe, Report Finds
Startups in Europe raised more capital through initial coin offerings (ICOs) in the last three years than any other region on the planet, according to a study released Thursday.
More than a third of all ICOs – 40% – are based in the European Union (EU), according to the analysis by venture capital firm Atomico. These 446 transactions raised $1.76 billion, nearly half (46%) of the worldwide total from token sales. The second biggest region for this activity was North America, with 244 campaigns raising $1.076 billion.
The report, entitled “The State of European Tech,” cited data collected by Token Data, a startup that tracks ICOs, as well as Atomico’s own survey of investors and startup founders.
What’s more, the EU might become the global leader in cryptocurrency and blockchain development over the next five years, according to the report. An increasing number of startups on the continent focus exclusively on blockchain development, accounting for a much higher share of companies founded in 2016 than in 2012.
Notably, the report found that roughly 25% of ICOs had some sort of decentralized team, where the company launching a campaign was headquartered in a different location than the founder or chief executive.
Ricky Tan of Token Data said he expects this figure to increase in the coming years.
In the report, he said:
“We see a pattern of geographical diversity between ICO founding teams and also within the teams themselves. If the future of business ideas lies in decentralisation, then decentralised founding teams will be a key aspect of it.”
Europe also has the greatest number of bitcoin nodes, with more than 5,000, according to the Atomico report. The U.S. comes in second with just over 3,300 nodes.
While the number of ICOs and blockchain startups is increasing, interest in “blockchain” in general is increasing even more rapidly.
Data from Stack Overflow cited by Atomico shows an exponential growth in the number of searches for the term, jumping from 110 in January 2015 to 14,500 in September 2017.
European Union flag image via Shutterstock
Written by CoinDesk
White House Team Is Monitoring Cryptocurrencies, Says Press Secretary
The Trump administration has said it is keeping an eye on cryptocurrencies like bitcoin in the wake of its recent explosive price jumps.
White House press secretary Sarah Sanders said during a press briefing session that bitcoin and other cryptocurrencies are “something that is being monitored by our team.”
In response to a reporter’s question on whether the U.S. government is planning for cryptocurrency regulations, Sanders mentioned that there is no specific announcement on the topic right now, adding that it had been brought up in a meeting earlier this week by Tom Bossert with the homeland security team.
“I know it’s something that he’s keeping an eye on. And we’ll keep you posted when we have anything further on it.”
While the cryptocurrencies are being monitored by the White House, it is also more positively exploring blockchain technology to improve U.S. government operations.
Comments made in March by Mark Calabria, chief economist to Vice President Mike Pence, indicated at the time that there is enthusiasm within the Trump White House toward blockchain, hinting that progress toward adoption could be seen in the coming years.
Sarah Sanders image via Shutterstock
Written by coinDesk
Bitfinex and Tether Break Silence, Go on Media Offensive
After months of radio silence, Bitfinex, the world’s largest cryptocurrency exchange, and Tether, the issuer of a dollar-pegged cryptocurrency, are responding to accusations of mismanagement.
In a statement emailed late Thursday to reporters, Ronn Torossian, a newly hired outside spokesman for both companies, blamed “questionable actors” for raising doubts about their financials and controls. Notwithstanding critics, he wrote, Bitfinex is “committed to becoming the most transparent crypto exchange in the industry.”
Specifically, he called out “Bitfinex’d,” the pseudonymous blogger who has thrown shade on the exchange in a series of lengthy Medium posts and YouTube videos.
“Who is Bitfinex’s biggest critic? An anonymous online Twitter user who throws allegations around without ever revealing his or her own identity,” Torossian wrote, adding:
“[W]henever someone lobs accusations and attacks behind the veil of anonymity, one has to question their motives.”
By contrast, Torossian went on to say, “[f]ar from hiding in anonymity, Bitfinex is led by a strong management team.” However, his statement did not name any of the managers, and as of Thursday evening they were still not listed on Bitfinex’s website.
The company is run by CEO Jan Ludovicus van der Velde, Chief Strategy Officer Phil Potter and Chief Financial Officer Giancarlo Devasini, Torossian said in a email.
Audit coming soon
The statement is also noteworthy for acknowledging that Tether is “related” to Bitfinex.
The link between the two organizations was long the subject of speculation but only recently confirmed by documents contained in the leaked Paradise Papers, which showed that Potter was a director and Devanisi a shareholder of Tether.
The New York Times cited the document in a recent lengthy article about the controversies surrounding Bitfinex. (Tether’s website did not identify any of its leaders as of Thursday night, either.)
On a related matter, Torossian addressed concerns raised by many of the companies’ critics about Tether’s reserves.
A full audit “will be released as soon as possible,” he wrote, noting that an interim report found the company had $442.9 million of cash as of Sept. 15 to “fully back” the tether tokens.
However, that report, from auditor Friedman LLP of East Hanover, N.J., contained some caveats. The account where the cash is held is in the name of a trustee, and Friedman said it could not vouch that Tether had any enforceable agreement with the trustee.
Similarly, Friedman said in the interim report that it did not evaluate the terms of the bank account and could not attest to Tether’s ability to withdraw funds or whether the money had been pledged for anything other than redeeming tokens. (The bank’s name is redacted in the publicly available version of the report.)
Reached by CoinDesk Thursday evening, Torossian said the disclaimers were standard for financial reports of privately held companies.
Meanwhile, Tether is “working closely with law enforcement” to investigate the breach it reported this month, in which $30 million worth of tether tokens were allegedly taken, Torossian wrote in the statement.
Returning to Bitfinex, Torossian also apologized for the exchange’s long silence, though he claimed the company’s growing exchange volume was the culprit.
Speaking of financial institutions, Torossian acknowledged that, like many cryptocurrency exchanges, Bitfinex has lost “a number of U.S.-based banking relationships.” Though he did not name any of them, Wells Fargo is a well-known example.
But the exchange “was able to maintain and add to its roster of banking partners around the world,” Torossian added, “providing the vast majority of its customers with a diversified and resilient banking network to provide consistent liquidity.” He did not name any of those banks, either.
Nor did Torossian directly address speculation by Bitfinex’d and others that the exchange has been printing tether tokens to drive up the price of bitcoin.
“Bitfinex abides by all existing laws and reporting requirements such as KYC/AML,” he wrote. The exchange “works closely with financial regulators, law enforcement, compliance personnel, and financial institutions to provide the highest possible level of protection and service for its customers.”
Soundboard via Shutterstock
Written by CoinDesk
ICOs Opening Doors to Blockchain, Investment in Africa
The price of the top digital currency is well above the means of many, especially in Africa. A Bitcoin in Nigeria, for example, is now worth over N3 mln. This is a far reach in a country where half of its approximately 200 million people live on less than N800 (about $2) a day.
UNDP puts 50.9% of Nigeria’s population as multidimensionally poor. An additional 18.4% of the population is considered to be nearly so. Nigeria’s current minimum wage stands at N18,000 (about $60) monthly.
These figures from Nigeria reflect the reality of many other African countries. Ghana recently introduced a new daily minimum wage of 9.68 cedis (about $2.20) up from 8.80 cedis.. In Kenya, the minimum wage was raised recently from Kshs 10,955 to Kshs 12,926 (about $125).
When compared to the UK where the minimum wage per hour is £6.50 (about $8.50), it is clear that not many Africans would be able to acquire an entire Bitcoin. The currency’s rising price may further discourage new people from jumping on its train. Yet, the urge to participate in the growing crypto ecosystem is increasing among many Africans.
The appeal of ICOs
Some of them now look to Initial Coin Offerings, which present Africans with a unique opportunity. Though the crowdfunding model requires caution due to increasing numbers of scams, its benefits seem to outweigh the downsides for many Africans. Basically, ICOs enable Africans to start and invest in projects with global appeal that are considerably less expensive than Bitcoin. Additionally, ICOs help Africans ensure their relevance in a global crypto-led financial evolution.
Founds speak up
Bashir Aminu, the founder of Cryptogene, writes:
“I think ICOs are crucial for the success of start-ups especially in places like Africa where access to traditional funding is extremely difficult. ICOs give startups the much needed head start to carry out and implement their products.”
Aminu believes ICOs are relatively unknown in Nigeria and are often confused with fraudulent schemes. He points out that it would be difficult to launch a Blockchain startup in the country without an ICO, because getting funding from banks is nearly impossible.
Marcus Adetola, co-founder of Potentiam, shares a similar view. He believes the ICO method presents a more user-friendly and easy public participation mechanism for fundraising. However, as a new global phenomenon with awareness still in infancy, Adetola notes that more time is needed for people to understand ICOs’ function and purpose:
“So the advice would be for people to educate themselves about ICOs and how they can use this new method to raise funds like never before, especially in Africa.”
Mounir Belaid, the co-founder at Sandfox Studio in Casablanca, has been encouraged by the interest ICOs have gained in Morocco. It has made pushing for this form of fundraising for local projects easier. Though bound by certain regulations, this new fundraising method is most needed to promote innovative project in the continent, Belaid says.
He explained that ICOs are the best possible promoter of Blockchain-based projects as they help draw global investors to Africa to improve local communities. He adds that ICOs that become successful will help gain governments’ attention to Blockchain technology and they will also motivate more Africans to innovate in the space to solve local problems.
“ICOs will help us to realize our projects more quickly. But with or without an ICO, we would realize them. It may just take more time.”