Stable Coin Project Raises $133 Million
A US-based start up project seeking to develop a stable coin has raised $133 million in funding, a filing with the SEC shows. The project by Intangible Labs intends to build a digital currency known as Basis designed to resist high volatility that marks the cryptocurrency space.
Investors include big names and companies like GV, Google’s venture capital arm, Lightspeed Capital, Andreessen Horowitz. The list also includes billionaire Stan Druckenmiller as well as Kevin Warsh, a former Federal Reserve governor.
The coin achieves its purpose through a mechanism designed to control its supply as to keep the price stable. The price of the stable coin will be monitored and coins added or removed. Basis is meant to serve as a medium of exchange, Nader Al-Naji, CEO and co-founder, Intangible Labs has previously said.
“Volatility of cryptocurrencies has prevented their widespread adoption,” Al-Naji says. The aim is to build a cryptocurrency, with all its advantages but which is stable, Al-Naji says.
The funds were raised were raised through a private placement to accredited investors.
According to a Form D filing, the company raised $125 million from 225 investors between March 22 and April 3.
It is not clear whether the rest of the tokens will be sold through a public sale as the company is still assessing regulations.
Regulators have been cracking down on cryptocurrencies and other ICOs from early this year almost bringing an industry that was fast growing to a halt.
Billions of dollars were raised in 2017 through ICO’s. This crowdfunding method side steps intermediaries and skirts many regulations governing such activities. Investors receive tokens or coins, the equivalent of stocks for participating in a project. These can be used within a network to access certain services or traded in an exchange.
The SEC chairman has previously said he considers cryptocurrencies as securities, an interpretation that can have serious consequences for those issuing or trading in them.
Other stable coins like Tether associated with the Bitfinex exchange exist. Tether, for example, is pegged on the US dollar and the company that issues them, also called Tether claims to have corresponding reserves in US dollars for every coin out there.
This claim was however put into question a few months ago. The implication was that Tether was artificially pumping Bitcoin prices.
Tether is intended to circumvent banks which have recently been restricting their services to cryptocurrency companies.