The Foundation has tapped the Celsius Network, a blockchain-based crypto lending program, to become its preferred crypto wallet, Celsius Network CEO Alex Mashinsky told CoinDesk.
The Litecoin Foundation is putting its capital to work, lending at interest through another cryptocurrency program.
As part of the deal, the Foundation will allocate an undisclosed portion of its treasury to the Network. LTC holders can receive up to 10.53% annually back on their crypto holdings and dollar loans as low as 4.95 percent as well.
Mashinsky said the endorsement by the Foundation validates the platform, which claims to give back up to 80 percent of its revenue to depositors.
“Litecoin being the first foundation to work with us and endorse us is a real milestone. It’s a huge event”, Mashinsky said. “That’s the first time I can say that the general community is recognizing Celsius for the utility it provides.”
Raising $50 million in a 2018 initial coin offering, Celsius has completed over $2 billion in loans in 2019, held $350 million annually in customer deposits, and issued over $3.5 million in interest.
Crypto custodian BitGo told CoinDesk they held some $1 billion in Celsius-based crypto deposits this past year, almost double the amount locked away in decentralized finance protocols according to DeFi Pulse.
The primary non-profit tasked to maintain the cryptocurrencies codebase, the Foundation has been actively seeking partnerships this past year. Notable additions have included the Miami Dolphins, and now, the Celsius Network.
The Foundation’s financials came under scrutiny last quarter following disclosures concerning employee pay during Q1. Litecoin creator and Foundation managing director Charlie Lee told CoinDesk at the time he would continue to fund the Foundation until financially stable.
Lee told CoinDesk the interest-bearing deposits were the onus for signing up with Celsius, particularly for LTC holders.
“We’ve chosen Celsius as the LF’s preferred interest bearing wallet as we are always interested in helping LTC holders take advantage of new use cases for their holdings. What better way to show our confidence in the product than by allocating a portion of the LF’s treasury.”
Lee told CoinDesk the Foundation has no plans for taking out loans on collateral, a product Celsius offers.
“At this time, we have no immediate lending or borrowing plans”, Lee said at the time. “As our relationship with Celsius evolves we are certainly open to exploring new opportunities.”
London-Based Crypto Custodian Copper Raises $8M for Expansion Overseas
Crypto custody provider Copper has raised $8 million in a Series A round – an investment it plans to use launching in new markets.
Participants in the Series A included two U.K.-based venture capitals, LocalGlobe and MMC Ventures, as well as the Berlin-based Target Global, which specializes in investing in European companies so they can fund global expansion, according to a Monday announcement.
The London-based startup said it aims to develop a presence in key regional areas, like Asia and North America, as well as enhance its offering to feature more sophisticated trading facilities found in traditional prime brokerage offerings.
“Copper was always designed to be a global offering”, said Copper founder and CEO Dmitry Tokarev, who was formerly CTO at Dolphin Wealth Management, a U.K.-based asset manager. “This venture funding round is a real vote of confidence from investors. Their support will allow us to accelerate our scale up, hiring teams in key regions and introducing new products and services to better meet their needs.”
Speaking to CoinDesk, Tokarev said the Series A will help the firm hire specialists who can deal with local regulations, as well as business development teams for the new markets. This will give greater support for existing customers in Asia and America, as well as provide the company with a toe-hold to begin offering services to a new client base.
Copper has also planned on establishing an office in Hong Kong, although the coronavirus outbreak has stalled the effort, with a final judgment to be made sometime at the end of Q1.
New products include a margining facility as well as tri-party repos, a type of contract that provides financial services to traders involved in borrowing funds by selling assets.
Launching 2018, Copper offers multi-signature custody and prime brokerage – services for institutional trading – to its clients, which include various funds, financial institutions, and high-net-worth private traders. This is provided by Copper’s Walled Garden infrastructure, giving clients access to trading facilities without taking digital assets out of custody.
Copper raised $1.3 million in a seed round in 2018 to build out its prime brokerage and custodian solution.
Describing the Walled Garden solution as a “fundamental breakthrough in the market”, Mike Lobanov, general partner at Target Global, said Copper was providing “institutions with traditional prime brokerage services for the crypto world.”
Last September, Copper reported it had processed $500 million in aggregated trading volume in the three months since the launch of its solution in June. $500 million was now Copper’s trading volume on a monthly basis, Tokarev told CoinDesk
“Since 2017, we have seen many crypto custody solutions emerge that don’t fully meet the needs of institutions,” said Tokarev. “Instead, they have built for an institutional framework that doesn’t exist yet, and is unlikely ever to, leaving institutions discouraged.”
“I think any volumes that we currently have, or anyone else in the sector would have, can be 10-times multiplied when the proper infrastructure is there,” he said.
Copper currently onboards an average of two to three funds every week and currently has about 30 active clients on the platform, according to Tokarev.
In mid-January, the custodian was selected to provide prime brokerage services for a fund created by private London investment house Nickel Digital Asset Management.