Institutional Crypto Dealer Secures $23 Million Funding Round from Airbnb Co-Founder

… venture capital heavyweights–including co-leaders Tribe Capital and Social Capital; investors Y Combinator, Khosla Ventures, Blockchain Capital; …

SFOX, a San Francisco-based cryptocurrency prime broker, has successfully closed a $22.7 million funding round to build an institutional-grade asset management platform for the industry’s largest investors.

As the former head of growth and business development at Airbnb, SFOX CEO Akbar Thobhani would appear to have struck a chord with some of the most influential figures in Silicon Valley.

SFOX’s Series A round attracted a number of venture capital heavyweights–including co-leaders Tribe Capital and Social Capital; investors Y Combinator, Khosla Ventures, Blockchain Capital; and Airbnb Co-Founder Nathan Blecharczyk.

Feeding the Whales

Catering to some of the most affluent investors in crypto, SFOX claims to have dealt more than $9 billion worth of crypto-assets to hedge funds, family offices and high net worth individuals—or what retail traders would dub the “smart money.”

Since 2014, SFOX has helped clients execute high-ticket cryptocurrency orders presumably in the tens, if not hundreds, of millions of dollars. By simultaneously purchasing from a multitude of exchanges and over-the-counter brokers, SFOX can offer its investors more attractive rates while mitigating the adverse effects of market footprints.

Where so-called “whales” may wish to purchase cryptocurrency on regular exchanges, the sheer size of their orders has been known to cause severe repercussions. As previously reported by CryptoSlate, the largest contract holder on OKEx purportedly caused market-wide chaos when their $460 million long position in BTC was partially liquidated.

Despite the market’s destitute capitalization, SFOX told Bloomberg that institutional interest is unwavering and that their business is growing “rapidly.” According to Thobhani, the new SFOX platform will make it easier for institutional clients to migrate to crypto from traditional assets such as equities.

As previously stated by Coinbase CEO Brian Armstrong, Thobhani believes that Wall Street is on the edge of adoption. He noted:

“More and more Wall Street will want to get involved, but the challenge most of them are having is that the platforms they’ve built for trading things like equities doesn’t transfer to crypto.”

Many investors may hold up the prospective VanEck Bitcoin ETF as the elixir for an institutional injection of capital; however, it would appear that an equally profound infrastructure is unfolding largely unnoticed.

Cover Photo by Daniel Olah on Unsplash

Disclaimer: Our writers’ opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.

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Former CIA Analyst Says Cryptocurrencies are Not a Threat to National Security

The article was prompted by recent news stories regarding Iran’s plans to make a state-backed cryptocurrency. It is suspected that the Iranian …

Former CIA analyst Yaya Fenusie has published a new article on Forbes arguing that although authoritarian governments are working to build cryptocurrency-based financial systems, cryptocurrencies themselves should not be feared or discouraged from a national security point of view.

Cryptocurrencies are Relevant to National Security

The article was prompted by recent news stories regarding Iran’s plans to make a state-backed cryptocurrency. It is suspected that the Iranian government has been researching blockchain technology since 2007. In July of this year, news broke that Iran’s official department for science formed a joint venture with the country’s central bank to work on developing a national cryptocurrency. The plan was intended to create a financial loophole for imposed US sanctions. Russia, one of Iran’s major allies, is reportedly pushing Iran to continue with the operation. Interestingly, Russia also attempted to help Venezuelan dictator Nicolas Maduro develop a national cryptocurrency following Venezuela’s economic collapse, but the project was quickly abandoned.

While details surrounding Iran’s national cryptocurrency project have yet to be revealed, the token is expected to be used by domestic banks for daily financial transactions. The authoritarian regime has stated that it intends to officially launch its token within three months; however, given the complexity of the project, Fenusie suspects that Iran has been secretly developing its cryptocurrency platform for well over a year.

“There should not be any doubt about the relevance of the crypto space to U.S. foreign policy and national security,” writes Fenusie. “Russia, Venezuela and now Iran are making it clear that they intend to resist U.S. sanctions by adopting blockchain technology-based mechanisms. These authoritarian regimes are looking to build an alternative financial system where there will be no repercussions for funding corruption, oppression and other malfeasance. U.S. sanctions are not perfect, nor exhaustive, instruments of foreign policy, but they are important for enforcing global standards of accountability to check nuclear proliferation, human rights abuses and terrorism.”

Suggested Reading: Learn more about potential applications of blockchain technology in our ‘What is Blockchain?‘ guide.

But Cryptocurrencies are Not a Threat

Despite the actions of authoritarain regimes, Fenusie argues that blockchain and cryptocurrency should not be perceived as direct threats to national security. As with many new technologies, criminals and corrupt governments often attempt to explore the potential for using said technology to commit nefarious acts. Fenusie doesn’t believe that Iran’s cryptocurrency will do much to bolster its national economy, as the new cryptocurrency is reported to be linked to Iran’s weak paper currency, the Iranian Rial. This will likely cool off investor interest, and even Iranian citizens are likely to find workarounds to invest in more worthwhile cryptocurrencies.

Nevertheless, in the event of future authoritarian threats involving cryptocurrencies, Funusie recommends the following policies:

  1. The US treasury department should reinforce the message that any US persons or institutions banking within the US financial system providing anything of financial value to the Iranian regime are in violation of US sanctions, regardless of whether the value is in fiat or cryptocurrencies.
  2. “The U.S. and other governments concerned about nations exploiting blockchain technology to entrench authoritarianism should acknowledge that, similar to the space race of decades ago, there is now a ‘crypto race’ emerging. The Group of Seven (G7) countries should be watching coordination among the rogue actors in this race and strategize ways to foster crypto/blockchain innovation that truly enhances economic and political freedom.”
  3. “The broader crypto space should not treat rogue regime crypto with ambivalence. Instead, blockchain tech influencers should ‘call out’ crypto schemes that fund oppressive regimes. Just as responsible cryptocurrency enthusiasts know that ICO scams hurt crypto’s image, they should understand the risk of authoritarian crypto to tarnish the technology’s reputation.”

Fenusie asserts that although the attempts by Russia, Venezuela or Iran to develop a globally accepted cryptocurrency are likely to fail, the protection against such an attempt comes from encouraging developers in free nations to produce better crypto products that defend key values like liberty.

Totalitarian regimes will always make attempts to exploit new technologies to support their corrupt systems, but this by no means implies that cryptocurrency itself is something that should be looked upon with scorn by the free world. In fact, it is only through encouraging development and productive use cases for technologies like cryptocurrencies that those who love liberty are able to protect themselves from corrupting forces.

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“There’s a dApp for That” Top 40 Decentralized Apps You Can Use Right Now

Toshi / Coinbase Wallet – As the name suggests, it’s a decentralized cryptocurrency wallet. It also features systems like peer to peer chat and a dApp …

While Blockchain has celebrated only a few theoretical birthdays, the number of people around the world number in the thousands when it comes to utilizing the technology and putting it to work in a various number of Decentralized Apps (dApps).

Having Blockchain be so much in its infancy does mean that the number of theoretical cases still outnumbers the practical uses, but also means that there are ‘growing pains’ that Ethereum blockchain, in particular, must overcome if it’s to enter the use of an ever growing population.

This, on its own, will take some time, but it’s been an otherwise impressive and inspiring thing to see major companies take to blockchain with a certain zeal and attempt to mesh it with applications. And from the standpoint of startups, there are as many dApps coming into use as there are stars in the sky (so to speak), with a remarkable scope of diversity too.

Whether you’re looking for a new game, something to supplement your work, to help you get more involved with your finances, to switch off or switch on to a new generation of video and social media, there’s a dApp for it.

Here are just some of the many kinds that are entering the blockchain world and coming to a mobile or computer screen near you.

The Needs And Musts

Civic – A data management system for blockchain users which offers a secure identity system too.

Toshi / Coinbase Wallet – As the name suggests, it’s a decentralized cryptocurrency wallet. It also features systems like peer to peer chat and a dApp portal.

Ethereum Name Service – Tired of your overly complex Cryptocurrency Wallet name? Ethereum Name Service allows you to change it into a simplified, easier to remember crypto address.

Brave – A decentralized web browser which is integrated with BAT and ERC-20 Tokens.

uPort – uPort functions as a secure user identity and data management system powered by the Ethereum blockchain.

Status – Positioning itself as an all in one system, Status provides an Ethereum powered browser, along with user chat, and a dApp portal.

MetaMask – This serves as a plugin for your web browser, giving you access to other blockchain services through your computer.

Marketplaces And Platforms

Decentraland – A decentralized Virtual Reality experience, where users can buy individual plots of land and build their own experiences on them.

District0x – This serves as a platform where users can create interconnected marketplaces and token-powered communities.

AdChain – A token powered platform that serves as a publisher registry, optimizing digital advertising.

ETHland – A decentralized platform used for peer to peer lending, backed by a number of digital assets.

imbrex – Connects the real estate market with the community through its free global listing network.

RARE – A completely decentralized listing platform for rare, digital artwork, all verified by blockchain and bought and sold using cryptocurrency.

Gnosis – Based on top of the DutchX protocol and works as a prediction market, used for digital asset valuation.

Golem – A powerful, global, open-source and completely decentralized super-computer that anyone can put to work for them.

Aragon – Disintermediates the formation and management of organizations.

Tokit – A platform that’s used for crowdfunding various media projects thanks to artist tokenization.

AugurA blockchain-powered, decentralized prediction market, allowing users to make investment predictions on real-world events.

Ujo – A decentralized music and media streaming platform that uses blockchain for various services like licensing and royalty management for artists that use it.

All Work And No Play

It’s not all just speculation, gaming and experiences, the blockchain world is becoming increasingly sophisticated, allowing users to put dApps to work for… well, work.

Balanc3 – An accounting platform, allowing users to keep on top of their crypto assets.

Gitcoin – This dApp allows users to monetize their work through the platform, providing an incentive for working for yourself.

Ethbalance – This acts as a decentralized recruitment and accounting tool, allowing users to find work and get paid in your crypto-assets of choice.

Bounties Network – Users can take on various ‘bounties’ of work, allowing them to earn ERC-20 or Ethereum for any bounties they complete.

Out Of Facebook But Not Out Of The Loop – Social Media

Some of the recent examples set by Facebook and Twitter gave you second thoughts about them? Luckily blockchain dApps are right there with you!

Minds – Advocating a completely censorship-free approach towards social media which also integrates ERC-20 tokens to incentivize its users.

Peepeth – Like Twitter, but completely decentralized and token-powered.

Numa – Completely no-frills, but serves as a completely decentralized, distributed social media platform.

All Work And Even More Play – Games

While there have been an impressive number of platforms for work and social media, there are a vast number of blockchain games that use Ethereum. And here are just a select few of them!

Gods Unchained – A competitive Trading Card Game which aims to be the blockchain world’s first esport.

Reality Clash – Powered by blockchain, Reality Clash is a first person shooter that immerses the player in an arena powered by Virtual and Augmented Reality.

Etheremon – Much like Pokémon, players catch and form a team of powerful monsters with the aim of defeating your opponents and going on adventures!

CryptoSpaceX – Explore the stars, build your own fleet and interstellar empire, or hang around the Vegastar and play minigames!

CryptoKitties – Build up your own collection of kitties, while also breeding your own unique ones to either add to your collection, or sell on for a profit!

FOMO3D – A cryptocurrency-based gaming and social experiment.

ETH.Town – Collect and build a real-estate empire, helped along the way by your own collection of heroes.

FunFair – A demonstrably safe, decentralized, safe and transparent casino.

Etheroll – A remarkably addictive game of rolling dice.

On The Market – Coin / Token Exchanges

These decentralized exchanges allow anyone to exchange their hard-earned fiat currencies for any number of accepted cryptocurrencies for the HODL or for general use, that’s on you!

Bancor – A decentralized exchange, specializing in serving as a liquidity network, token exchange and bounty system.

AirSwap – A completely decentralized Token and Digital Asset Marketplace.

IDEX – Not only a decentralized marketplace for crypto, but it offers real-time trading and transaction throughput. Highly desirable for crypto investors or whales.

LocalEthereum – A safe, fast and private way to buy and sell ETH through a variety of methods.

ForkDeltaA decentralized cryptocurrency coin / token marketplace.

MakerDAO – A multifaceted DAO that features the OasisDEX exchange, investment products, and the DAI stablecoin.

0x – This serves as a protocol for decentralized cryptocurrency exchange that is put to use extensively by dApps like Radar Relay, Paradex, and DDEX.

MelonPort – A platform for decentralized digital asset management and investment.

For more information about what dApps are out there and how you can get yourself hooked up to the Web 3.0 as and when it happens, check out platforms like State of the Dapps or Dappradar.

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Co-Founder of Airbnb Backs Crypto Fund Dealer SFOX

… funding round was led by Wall Street giants including Goldman Sachs, Nyca Partners, Wells Fargo, JPMorgan, Citigroup, and Andreessen Horowitz.

SFOX, an institutional-grade cryptocurrency prime dealer has announced that it has raised $22.7 million its Series A to fund the development of a full-featured asset management platform.

The platform which operates as a trading hub for institutional investors, family offices, and wealthy individuals was founded in 2014.

New market in sight for SFOX

SFOX announced on Thursday, August 16 that its new equity financing (Series A) was led by Tribe Capital and Social Capital, and has backing from Airbnb co-founder Nathan Blecharczyk.

Akbar Thobhani, the CEO of the SFOX project, stated that the firm’s move into cryptocurrency is a response to increasing interest from its clients in more exposure to cryptocurrency assets. Thobhani commented:

“We continue to observe sustained and increasing demand from institutions that want to include cryptocurrencies as part of a diverse portfolio but are reluctant to do so because of uncertainty and volatility.”

According to the report, the project has also been backed by Y Combinator, Danhua Venture Capital, Digital Currency Group amongst others.

Services offered by SFOX

The goal of SFOX is to aid high volume traders in fulfilling their buy and sell demands by executing their orders through the firm’s integrations with different crypto exchanges.

SFOX helps institutional investors execute large cryptocurrency trades, routing orders through a myriad of exchanges and over-the-counter (OTC) trading desk.

The firm helps these investors to get the best available prices while also minimizing the impact that large orders have on cryptocurrency prices in the spot markets.

Reason for the move

By venturing into the cryptocurrency market, SFOX aims to minimize the impact of high volume trading on the different cryptocurrencies in the market, at the same time, serve to boost their trading liquidity.

SFOX announced that it would continue to offer its current trading facilities while the funding would help the firm launch a cryptocurrency asset management service.

In the Medium post released by SFOX, the company noted that the goal of the funding round is to add cryptocurrency pairs, improve trading liquidity, and expand into “new geographical regions.”

CEO, Thobhani has announced that the firm has drafted out plans for geographical expansion and plans to increase manpower of SFOX in the coming 12 months.

“The distributed nature of cryptocurrency has given rise to a large breadth of exchanges around the globe, creating a fragmented market and limited liquidity. . .Over the last four years, we’ve been able to provide our clients a single point of access and the best price execution by building the necessary smart routing technology to navigate and connect these global markets and exchanges.”

Along with the report, SFOX announcement that it has successfully managed to facilitate $9 million in transaction volume so far, also reporting a 12-fold growth in the number of clients already this year.

Growth of the institutional investors in the industry

Similar to the announcement of SFOX, Axoni, an enterprise-focused blockchain startup raised $32 million in a funding round held last week.

The Axoni funding round was led by Wall Street giants including Goldman Sachs, Nyca Partners, Wells Fargo, JPMorgan, Citigroup, and Andreessen Horowitz.

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Bitcoin’s Non-Correlation Shows Risk of Diversifying Cryptocurrencies

There’s been plenty of discussion on whether Bitcoin and other cryptocurrencies are correlated to commodities and larger financial markets. And while …
Correlation diversify portfolioBitcoin Investment

Eustace Cryptus| Aug 17, 2018 | 15:00

The belief that cryptocurrencies have a correlation to traditional markets may be leading amateur investors down the wrong path putting their portfolio at risk.

Cryptocurrency Not Inversely Correlated to Larger Markets

There’s been plenty of discussion on whether Bitcoin and other cryptocurrencies are correlated to commodities and larger financial markets. And while there is yet to be a definitive answer to this question, it is clear that cryptocurrencies tend to follow their own path.

Plenty of financial gurus and novice investors suggest that a properly diversified portfolio would contain a fractional amount of cryptocurrency. To date, the exact amount varies with some suggesting no more than 2% of the total portfolio value, while a recent Yale study suggests as much as 6%.

3 Reasons Why You Need Tkeycoin in Your Portfolio

The logic behind this advice lies in the conventional practice that every solid portfolio includes a small percentage of high-risk assets along with the belief that cryptocurrencies are uncorrelated to traditional assets, which in theory should provide a bit of padding during general market volatility.

This week’s positive performance from Bitcoin 00 serves as proof of the aforementioned practice. But how could one forget that the overall cryptocurrency market is down significantly as the $830 billion market capitalization of December 2017 currently rests at $207, according to data from CoinMarketCap.

This calls into question the assumption of non-correlation as cryptocurrency markets have steadily sunk to new yearly lows during wider market sell-offs.

It’s All About Diversity

In a recent interview with Bloomberg, Bitwise Asset Management Inc. Vice President, Matt Hougan suggested that “Non-correlation is not the same as inverse correlation so there’s no guarantee that when the market goes down crypto will go up.”

Hougan believes that “over the long term, we think the fundamental drivers of crypto are different from the fundamental driver of equities and other assets, and we would expect the lower correlation to persist.”

A number of financial experts suggest that amateur cryptocurrency investors are assuming there is an inverse correlation between cryptocurrencies and traditional markets as they attempt to connect geopolitical events such as a currency crisis, tariff war or political instability, to their predicted positive impact on cryptocurrency price. But so far this assumption has yet to become fact.

In fact, studies have shown that when a scale between 1 and -1 is applied, Bitcoin hardly ever moves beyond 0.5, which shows that bitcoin’s price action is hardly linked or impacted by events taking place in larger financial markets.

5 Blockchain-Based Diversification Options for Cryptocurrency Portfolios

Are Altcoins Too Unstable to Hodl?

While a diversified cryptocurrency portfolio or even a traditional asset portfolio with some cryptocurrency allocations would have provided stellar returns in 2017, this strategy may not be the most effective for 2018 and beyond, especially for investors who only invest in cryptocurrencies.

The fact that Bitcoin is closely correlated to other cryptocurrencies means that altcoins are less likely to decouple or diverge from Bitcoin price action. This is exactly why heaps of altcoins are dipping below yearly lows while Bitcoin whipsaws between unpredictable gains and losses. At the same time, Bitcoin dominance has been rising in 2018 to over 50%.

After an incredibly rough year for cryptocurrencies, investors might reconsider whether or not building a ‘hodl portfolio’ is the wisest idea. To wit, the future of many small altcoins is uncertain and an increasing number of studies are beginning to show that Bitcoin and larger financial markets are not inversely correlated.

Do you think Bitcoin and other cryptocurrencies are inversely correlated with larger financial markets? Share your thoughts below!

Images courtesy of Shutterstock

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