Chinese state company launches crypto funds

It has been claimed that a large state-owned corporation in China would be creating new cryptocurrency funds, which indicates the company has a more optimistic position on the sector than was previously believed. According to a local news outlet that focuses on technology, 36Kr, CPIC Investment Management, which is a subsidiary of China Pacific Insurance (CPI), is teaming up with investment company Waterdrip Capital to develop two cryptocurrency investment funds.

CPI is the second-largest property insurance firm on the Chinese mainland, and it is owned by the Chinese central government, the government of the Shanghai city government, and China Securities Finance. Both of the new crypto funds, known as the Pacific Waterdrip Digital Asset Fund I and the Pacific Waterdrip Digital Asset Fund II, are venture capital funds that will handle proof-of-stake digital assets. These funds were created by the same company. Investors from institutions as well as rich individuals will be sought for by both funds.

Blockchain-related initiatives and cryptocurrency firms might get financial backing from the international investment firm known as Waterdrip Capital. It was established in 2017, and it is well-known for its support of the Chinese cryptocurrency mining business as well as its investments in initiatives such as Peaq, a decentralized Web3 network built on Polkadot.

According to a tweet posted by Waterdrip Capital on Monday, the launching of two joint cryptocurrency funds by CPIC Investment Management and Waterdrip Capital is tied to the adoption of incentive policies relating to virtual assets by the Hong Kong government. The statement was sent in response to Waterdrip’s announcement that it will be partnering with CPIC Investment Management to create the funds.

This revelation comes at a time when the government of Hong Kong is becoming more dedicated to establishing local cryptocurrency infrastructure. In doing so, the government hopes to differentiate its approach to cryptocurrency regulation from China’s prohibition on cryptocurrencies, which will be imposed in 2021. At the end of March, there were rumors circulating online that Chinese state-owned banks were showing interest in several cryptocurrency companies based in Hong Kong.

In recent years, the government of China has taken a harsh position against cryptocurrencies, with prohibitions placed on initial coin offerings, cryptocurrency trading platforms, and mining operations, among other cryptocurrency-related activities. The fact that a state-owned corporation has decided to offer cryptocurrency funds, on the other hand, points to a more bullish picture for the sector.

China has been hard at work developing its very own kind of digital money, which it refers to as the digital yuan, and it is now undergoing testing in a number of different places. China’s bigger objective is to become a leader in the digital economy and to minimize its dependency on the US currency. One step toward achieving this goal is the creation of the digital yuan.

In spite of China’s past position on cryptocurrencies, this action by a state-owned corporation implies that China’s views about the sector may be shifting. It is not yet clear if other corporations in China will follow this example and form their own cryptocurrency funds or whether this action is an isolated incident.


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Lightspeed Venture Partners Launches 4 Crypto Funds with $7.1B

Venture Capital (VC) firm Lightspeed Ventures has announced it has secured the cumulative $7.1 billion to bankroll 4 new crypto funds.


As announced by the VC, the four funds include Lightspeed Venture Partners XIV-A/B LP, Lightspeed Venture Partners Select V LP, Lightspeed Opportunity Fund II LP, and Lightspeed India Partners Fund IV, which will focus exclusively on Indian innovators.

Per the details shared, each of the funds notably closed with $1.98 billion, $2.26 billion, $2.36 billion, and $500 million, respectively. 

Besides the announcement of these funds, Lightspeed said it has also launched Lightspeed Faction, an independent team dedicated to building on Lightspeed’s nine-year history of backing exceptional founders in blockchain infrastructure. The Lightspeed Faction team will be led by investors Sam Harrison and Banafsheh Fathieh.

Lightspeed has one of the broadest allowances as a VC supporting the digital currency ecosystem. Its funds are injected into innovative projects irrespective of their stage or a particular geographical location. 

“We believe in investing at the earliest stages of innovation, partnering with generational entrepreneurs who have clarity of vision, an insatiable desire to build something enduring, and the conviction and courage to compete and win against all odds,” said Arif Janmohamed, Partner, Lightspeed. “We love to partner with and even incubate companies around core dislocations in the enterprise landscape and to build relationships with prospective entrepreneurs years before they are ready to start building.”

The latest capital accumulation by Lightspeed shows that investors are unbothered by the latest downturn in the crypto ecosystem.

Lightspeed Venture Partners is one of many VCs dedicating funds to support innovative projects in the emerging Web3.0 world. While the combined $7.1 billion capital from the four funds is the largest seen thus far, other outfits like Haun Ventures and Andreessen Horowitz (a16z) have also previously floated $1.5 billion and $4.5 billion funds, respectively.

Image source: Shutterstock


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Grayscale Files Form 10 with SEC for its 3 Trusts

Grayscale Investments announced on Thursday that it has publicly filed a Registration Statement on Form 10 with the Securities and Exchange Commission (SEC) on behalf of Grayscale® Horizen Trust, Grayscale® Stellar Lumens Trust, and Grayscale® Zcash Trust.

The new Form 10 filings are voluntary and subject to SEC review. If the SEC considers the Registration Statements filed today as effective, then it would designate the trusts (funds) as Grayscale’s investment vehicles to become SEC reporting companies and register their shares, according to Section 12(g) of the Securities Exchange Act of 1934, as amended (the Exchange Act).

This means that accredited investors who buy shares in the Funds’ private placements would have an earlier liquidity opportunity, as the statutory holding period of private placement shares would be reduced from 12 months to six months under Rule 144 of the Securities Act of 1933.

If the registration statements become effective, then the funds would file quarterly and annual reports, current reports, and audited financial statements with the SEC, including complying with all other obligations under the Exchange Act. 

The Trust is a traditional investment product that provides investors with exposure to cryptocurrency in the form of security, thus avoiding the challenges of buying, storing, and safekeeping crypto directly.

The funds are investment products that allow investors to more effectively implement strategic and tactical asset allocations that incorporate digital assets by using the funds’ shares. The move reflects Grayscale’s commitment to move such funds forward through the product pipeline highlighted in the company’s roadmap to launching digital currency ETFs. 

The firm, a New York-based premier digital currency investing and crypto asset management company, already has six SEC reporting products: Grayscale® Bitcoin Trust, Grayscale® Bitcoin Cash Trust, Grayscale® Digital Large Cap Fund, Grayscale® Ethereum Trust, Grayscale® Ethereum Classic Trust and Grayscale® Litecoin Trust.

Grayscale has plans to continue to release new funds to offer diversified exposure to additional cryptocurrencies. The firm still seeks to launch a Bitcoin Spot ETF that has been rejected by the SEC.

Grayscale is aware that Stellar lumen (XLM), Zcash (ZEC), and Horizen (ZEN) are some of the potential cryptocurrencies with good investment opportunities for customers.


Image source: Shutterstock


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JPMorgan now offers clients access to six crypto funds … but only if they ask

JPMorgan Chase quietly opened up access to six crypto funds over the past three weeks as it looks to offer crypto exposure to a variety of clients.

In the latest move, the bank’s private clients will now have access to a new Bitcoin fund created by crypto investment firm New York Digital Investment Group (NYDIG).

NYDIG is owned by Stone Ridge Asset Management and the “Stone Ridge Bitcoin Strategy Fund” offers exposure to Bitcoin via futures markets.

The NYDIG fund is in addition to five crypto funds that the bank opened access to last month: Grayscale Investments’ Grayscale Bitcoin Trust, Bitcoin Cash Trust, Ethereum Trust and Ethereum Classic Trust, as well as the Osprey Bitcoin Trust.

While the traditional financial institution has taken a big leap by offering crypto exposure via six different funds, it is reportedly taking a cautious approach to how it offers its new digital-asset services.

According to unnamed sources quoted by Business Insider, JPMorgan advisors are not allowed to overtly promote the crypto funds, and can only conduct the transactions upon the client’s request.

The Grayscale and Osprey Funds are open to all users of its various wealth management platforms including its self-directed Chase trading app, while the NYDIG fund is only open to private banking clients.

Related: US megabank JPMorgan to hire more blockchain talent

The investment banking giant has a complicated history with cryptocurrency, after CEO Jamie Dimon described Bitcoin as fraud back in 2017.

Analysts at Goldman Sachs appear to be working through some of the same issues, despite the firm actively working to offer exposure to the sector.

In June, Jeff Currie, the global head of commodities research at Goldman Sachs described Bitcoin as a “risk-on” asset similar to copper. In the same month, analysts from the bank released a crypto report which concluded that Bitcoin is not “a long-term store of value or an investable asset class”.

Goldman Sachs currently provides crypto services through a derivatives trading desk and a Bitcoin futures trading platform that was rolled out last month. The firm has also filed for a sort-of DeFi-based ETF in late July.