One River Digital managed to rake in $41 million during its Series A funding round
According to a report by Bloomberg, cryptocurrency-oriented fund One River Digital Asset Management has secured $41 million from banking giant Goldman Sachs, leading cryptocurrency exchange Coinbase and other investors during its Series A funding round.
One River, which made a killing during the pandemic-induced crash because of its volatility-focused strategies, revealed that its cryptocurrency offshoot held $600 million worth of Bitcoin in mid-December. Presently, One River Digital also manages another fund that holds Ether. One River Digital currently has a valuation of $186 million.
CEO Eric Peters says that the hedge fund is readying for the ongoing transition to tokenization:
And in that world, the opportunity is so much bigger. The question was: How do we capitalize on that?
The $20 billion hedge fund management company Brevan Howard Asset Management, which is a partial owner of One River Digital, earmarked 1.5% of its flagship fund’s assets for cryptocurrency buys in April.
In March, One River hired former Securities and Exchange Commission boss Jay Clayton as its cryptocurrency advisor.
Prior to taking on his job as the top Wall Street cop, Clayton had served as outside legal counsel for Goldman.
One River Asset Management was served a subpoena by Ripple Labs, a company that was taken to court by Clayton during the last days of his tenure.
‘New Blow’ as Large Crypto Exchanges Are Told to Pay British Tech Tax
Crypto exchanges operating in the United Kingdom â€“ including the likes of Coinbase â€“ will be forced to pay a recently created tech tax â€“ with the British tax body, HM Revenue and Customs (HMRC), declaring that cryptoassets â€œare not financial instruments.â€
The British Treasury last year announced the launch of a new 2% sales charge on online vendors, search engines and social media providers with global revenue of over USD 666.4m and domestic sales above the USD 33.3m mark.
Per the Telegraph, the tax office has informed crypto exchanges that they are subject to the levy, which was created in a bid to make sure the likes of Google and Amazon â€“ who have been criticized for finding tax workarounds in the UK â€“ contribute more to the Treasuryâ€™s coffers.
The same media outlet noted that although Coinbaseâ€™s UK operations had reported sales worth just under USD 24m, â€œthe company recently reported that global revenues had quadrupled, meaning it is likely to pass the UK threshold in 2021.â€
However, the tax may be short-lived, at least in its current form: earlier this year, the G20 agreed to create a streamlined tax essentially aimed at global tax giants. The measure will force some of the world’s biggest companies to cough up some USD 150bn in extra tax revenue each year.
Last month, the BBC reported that G20 chiefs had agreed to create a global minimum tax rate of 15% for large companies, and would enforce the measure starting in 2023.
In the meantime, however, the British â€œtech taxâ€ is still in place â€“ and Coinbase is likely to have to pay it.
HMRCâ€™s ruling that cryptoassets â€œare not financial instrumentsâ€ is key. Financial providers are exempt from the tax, but the tax bodyâ€™s insistence that tokens â€œdo not qualify as commodities or moneyâ€ means that crypto trading platforms cannot slip through the net.
The same media outlet quoted the crypto pressure group CryptoUK as claiming that it was â€œunfairâ€ to classify crypto â€œdifferently to other financial assetsâ€ â€“ particularly as the UK tax bodyâ€™s American counterparts largely consider coins to be commodities.
CryptoUK director Ian Taylor was quoted as calling the move â€œa new blowâ€ to crypto exchanges, who were already reeling from â€œarduousâ€ licensing measures announced by the regulatory Financial Conduct Authority â€“ ultimately leading to higher fees for exchange customers.
Crypto Exchanges Facing “Digital Tax” Blow in U.K.
Cryptocurrencies are neither currencies nor commodities, according to Her Majesty’s Revenue and Customs
Cryptocurrency exchanges have to pay a 2% digital services tax in the U.K., according to a Sunday report by The Daily Telegraph.
They do not qualify for an exemption granted to financial marketplaces since the Her Majesty’s Revenue and Customs office doesn’t recognize cryptocurrencies as “financial instruments.”
The tax on the local revenues of large tech companies was introduced in April 2020.
CryptoUK, a crypto lobbying group, is not happy about the lack of the exemption since it would further stifle the industry.
The U.K. arm of the Coinbase exchange is expected to easily surpass the revenue threshold of £25 million ($33 million) due to the crypto trading boom in 2021.
However, HMRC is adamant that crypto assets cannot be classified as either commodities or currencies.
In October, European governments forged a deal with the U.S. to establish a new global tax regime to eschew America’s retaliatory tariffs.
Bitpanda New Partner Lydia’s 5.5M Users Will be Able to Invest in Crypto
Major French mobile financial services app Lydia is slated to offer its 5.5m users exposure to a wide range of crypto assets after a partnership with the Austrian crypto exchange Bitpanda.
As part of the deal, Lydia will integrate Bitpanda’s digital asset investment product, dubbed ‘White Label Solution,’ to allow its customers to invest 24/7 in more than 100 digital assets, including cryptocurrencies, fractional stocks, exchange-traded funds (ETF), and precious metals.
Founded in 2013, Lydia is a daily financial “super-app” said to be used by a third of the French 18 to 35 year olds. The app has raised a total of USD 131m in two funding rounds in 2020, though it did not disclose valuation.
“With Lydia trading, our ambition is to widen access to investment assets, to make it accessible to everyone whether they are simply curious, beginner investors or experts,” said Cyril Chiche, the app’s CEO and co-founder.
“Our goal is to reimagine what it means to invest, by making simple, easy-to-use financial products for everyone,” Eric Demuth, Bitpanda co-founder and CEO, was quoted saying.
Bitpanda raised USD 170m earlier this year in a Series B funding round and earned a valuation of USD 1.2bn, becoming Austria’s first tech unicorn. In its Series C funding round, however, the exchange raised USD 263m, earning a valuation of USD 4.1bn.
Meanwhile, the exchange has been aggressively expanding its presence across Europe. Just recently, Bitpanda unveiled a partnership with Fabrick, an Italian open finance provider, that will offer digital asset trading services to Italian banks and fintechs.
The exchange has also hired former JPMorgan executive Joshua Barraclough as CEO of its advanced trading platform Bitpanda Pro.
“We are confident that this is just the beginning: we are committed to offering everyone investment options for any budget and risk appetite,” Demuth added.