Circle Acquires Crowdfunding Platform and Broker-Dealer SeedInvest

Crypto finance company Circle has acquired equity crowdfunding platform and broker-dealer SeedInvest.

Cryptocurrency finance company Circle Internet Financial Ltd. has acquired equity crowdfunding platform and broker-dealer SeedInvest, according to an announcement published October 5. Exact terms of the transaction were not disclosed.

New York-based SeedInvest was founded in 2012 as a startup investing platform. Since then, the company has reportedly raised capital for 220 firms through more than 240,000 investors. The average investment per company through SeedInvest is said to be $500,000, while the largest investment was$2,000,000.

Once the acquisition is approved by the Financial Industry Regulatory Authority (FINRA), it will reportedly enable Circle to expand SeedInvest’s offerings to support cryptocurrencies, including fiat stablecoins and issuing and offering tokenized securities.

Additionally, companies will reportedly be able to raise capital through a regulated platform, get access to retail investor portfolios via Circle Invest, and provide investors with secondary market liquidity on Circle’s cryptocurrency exchange. Circle CEO Jeremy Allaire told Bloomberg in an interview:

“This was a company who had been at the forefront of collaborating with government to figure out how to make it possible to innovate in the way people raise capital. Crypto securities are going to become a major new category of securities that ultimately every business is going to adopt, just like every business has a website.”

Earlier this week, Circle launched a new feature for its crypto investment app Circle Invest dubbed “Collections,” that gives customers the option to invest in one or more collections of crypto assets, each divided according to a particular theme: “Platforms, Payments, and Privacy.”  After choosing a collection category, users can invest in the entire category in one swoop.

In September, Circle launched a USD-backed digital token dubbed the “USD Coin (USDC).” Per Circle, over 20 companies are about to announce support for USDC, while others might add trading through the open ERC-20 standard.

Circle was founded in 2013 by investment banking and management giant Goldman Sachs. The company offers four products including Circle Pay, which is a fiat money sending service with a social messaging component, and Circle Trade, which is a liquidity provider of cryptocurrencies and reportedly moves over $2 billion each month.

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Circle Raises $110 Mln In Investment Round, Plans To Release Fiat-Based Stable Coin

Circle and Bitmain’s cooperation has resulted in a $110 mln investment round and the planned development of a fiat-based stable coin, which will reportedly be released this summer

Boston-based Circle Internet Financial Ltd., a digital currency products developer, has closed a $110 mln fundraising round led by mining hardware manufacturer Bitmain, Bloomberg reports May 15. The two companies are now partners in a project to create a token which is backed by US dollars.

The investment lifts Circle’s valuation to nearly $3 bln, which is more than six times what it was in 2016. The partnership between Bitmain and Circle has also resulted in plans to develop a fiat-backed token or “stable coin”, which aims to address the unstable nature of some cryptocurrencies. The project is called Circle USD Coin, or USDC, and will reportedly be released by Circle in the summer.

USDC will be an ERC-20 token based on the Ethereum network. It will be backed one-to-one with the dollar and is lauded by supporters to carry many of the benefits of cryptocurrencies, without the risk of volatility. Circle CEO Jeremy Allaire said in an interview at an industry conference Monday, that the token will also provide greater transparency. He added:

“It’s a version of fiat that can move at the speed of the Internet with global reach, with much less cost, with high levels of security. It’s a huge improvement for how fiat money transmission can work around the world for consumers and for businesses who might want to collect digital payment with tokens.”

Circle, which has 7 mln users, is looking to integrate USDC in its Circle Pay payment app and in Circle Trade, a crypto OTC desk and liquidity provider. The company also plans to offer USDC on its cryptocurrency exchange Poloniex. Co-founder Sean Neville said that Circle hasn’t yet decided whether it will charge fees for traders using USDC, as the objective is to increase its circulation.

Fiat collateralized stable coins like USDC are the easiest type of stable coin to implement, as they function much like an IOU. Every token is paired with an equal amount of fiat currency, which is held by a central custodian. Holders are then able to redeem their coins for the stable value denominated in fiat.

In general, stable coins aim to carry both the relative price stability of fiat currencies, and keep the core values of cryptocurrencies such as decentralization and security. For truly decentralized stable coins to work, there must also be a system in place that can reliably obtain the exchange rate between the stable coin and the pegged asset, without leaning on third-party institutions that can be manipulated.

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