One of cryptos longest-running exchanges has been sold

One of the longest-standing crypto exchanges has new owners after Europe-based Bitstamp was sold to South Korea’s Nexon, marking the gaming firm’s second such acquisition.

The acquirer is NXMH, a Belgium-based PE and investment firm owned by NXC — the parent of Nexon — and it will take a majority 80 percent stake in the business for an unknown fee. The New York Times’ Nathaniel Popper suggested earlier this year that Bitstamp was in the process of being sold “to South Korean investors” for $400 million, but NXC declined to comment on the price when asked by TechCrunch.

NXC acquired 65 percent of Korea-based exchange Korbit one year ago for 91.3 billion KRW, or approximately $79.5 million at the time.

Bitstamp was founded in 2011 by Slovenian entrepreneur Nejc Kodrič with an initial €1,000 and it survived the heady early days of crypto, unlike a certain peer named Mt. Gox. Today, Bitstamp is ranked inside the world’s top 30 exchanges based on trading volume with more than 100 staff. Bitcoin and XRP are among its most traded tokens, according to data from Coinmarketcap.com.

The company has a license to do business across the EU but it also works with customers worldwide.

Bitstamp has been profitable since its early life, but Kodrič revealed the sale is down to the potential to work with NXC, which he sees as a like-minded partner.

Bitstamp has been regularly approached by suitors for quite some time. The reason why we finally decided to sell the company is a combination of the quality of the buyer, the quality of the offer and the fact that the industry is at a point where consolidation makes sense. A major factor in agreeing to the sale is that the mission, leadership and vision of the company remains the same.

We believe this acquisition is the logical next step in Bitstamp’s growth as a company and I look forward to the future with this team.

The Bitstamp CEO said business will continue as normal — he’ll retain his position as CEO and keep 10 percent of the company.

Interestingly, he told Fortune that regulatory compliance meant the deal took some ten months to close after first being agreed in December 2017 when crypto market valuations hit a peak — with Bitcoin, in particular, getting close to a record $20,000 valuation.

Bitstamp raised around $14 million in capital from investors along its journey, with U.S-based Pantera capital one of its major backers.

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Googles blanket ban of cryptocurrency ads ends next month

Google is rolling back its ban on cryptocurrency advertisements – following a similar move made by Facebook earlier this summer, CNBC reports. Google in March was among the first of the major platforms to announce it would no longer run ban cryptocurrency ads, due to an abundance of caution around an industry where there’s so much potential for consumer harm.

Facebook, Twitter, and even Snapchat had also banned cryptocurrency ads, for similar reasons.

But Facebook moved away from its blanket ban this June, when it said it would no longer ban all cryptocurrency ads, but would rather allow those from “pre-approved advertisers” instead. It excluded ads that promoted binary options and initial coin offerings (ICOs), however.

Google is now following suit with its own policy change. The update was announced today, we’ve confirmed.

Google’s policy still bans ICOs, wallets and trading advice, CNBC reports, citing Google’s updated policy page which points to a list of banned products.

But the October 2018 policy update says that “regulated cryptocurrency exchanges” will be allowed to advertise in the U.S. and Japan.

To do so, advertisers will have to be certified with Google for the specific country where their ads will run, a process that begins in October. The policy will apply to all accounts that advertise these types of financial products, Google says.

Banning cryptocurrency ads on the part of the major platforms was a good step in terms of consumer protection, due to the amount of fraud and spam in the industry. According to the FTC, consumers lost $532 million to cryptocurrency-related scams in the first two months of 2018. An agency official also warned that consumers could lose more than $3 billion by the end of the year, because of these problems.

But for ad-dependent platforms like Facebook and Google, there’s so much money to be made here. It’s clear they wanted to find a way to let some of these advertisers back in. Google parent Alphabet makes around 86% of its total revenue from ads, CNBC noted, and booked over $54 billion in ad revenue in the first half of the year.

Google has not yet responded to a request for comment.

Googles blanket ban of cryptocurrency ads ends next month

Google is rolling back its ban on cryptocurrency advertisements – following a similar move made by Facebook earlier this summer, CNBC reports. Google in March was among the first of the major platforms to announce it would no longer run ban cryptocurrency ads, due to an abundance of caution around an industry where there’s so much potential for consumer harm.

Facebook, Twitter, and even Snapchat had also banned cryptocurrency ads, for similar reasons.

But Facebook moved away from its blanket ban this June, when it said it would no longer ban all cryptocurrency ads, but would rather allow those from “pre-approved advertisers” instead. It excluded ads that promoted binary options and initial coin offerings (ICOs), however.

Google is now following suit with its own policy change. The update was announced today, we’ve confirmed.

Google’s policy still bans ICOs, wallets and trading advice, CNBC reports, citing Google’s updated policy page which points to a list of banned products.

But the October 2018 policy update says that “regulated cryptocurrency exchanges” will be allowed to advertise in the U.S. and Japan.

To do so, advertisers will have to be certified with Google for the specific country where their ads will run, a process that begins in October. The policy will apply to all accounts that advertise these types of financial products, Google says.

Banning cryptocurrency ads on the part of the major platforms was a good step in terms of consumer protection, due to the amount of fraud and spam in the industry. According to the FTC, consumers lost $532 million to cryptocurrency-related scams in the first two months of 2018. An agency official also warned that consumers could lose more than $3 billion by the end of the year, because of these problems.

But for ad-dependent platforms like Facebook and Google, there’s so much money to be made here. It’s clear they wanted to find a way to let some of these advertisers back in. Google parent Alphabet makes around 86% of its total revenue from ads, CNBC noted, and booked over $54 billion in ad revenue in the first half of the year.

Google has not yet responded to a request for comment.

RIP crypto

RIP “crypto”. You had a good run.

This week veteran cryptographer Matt Blaze, finally gave in — to what must have been a near-constant, low-level drone of ‘CAn Buy Crypto.com???$$$$!’ spam — and sold the pithy domain name he registered in 1993, in the midst of the PC era crypto wars, to use as an encryption policy resource, to Monaco, a Zug, Switzerland-based payments and cryptocurrency platform startup whose self-styled mission is “accelerating the world’s transition to cryptocurrency”, positioning itself at the nexus of the current crypto craze.

So crypto.com now points to cryptocurrencies.

Which seems a fitting moment to say RIP “crypto” as shorthand terminology for an entire domain of cryptographic work that underpins so many more things than just Bitcoin or Ether or Ripple or Litecoin or Zcash — or any of the myriad digital coins that have winked (and more recently minted) into virtual existence over the last decade or so, hoping to hit the crypto jackpot.

Frankly this is not at all fair. But, linguistically, so it goes. Languages live or they die. And to live in linguistic terms means to shift your meaning as word usage ebbs and flows.

The sale of crypto.com tells us not so much that money talks, though clearly there’s that too — domain sellers were speculating that the price for crypto.com could have been a cool $5M-$10M, per this Verge report from March; though the actual price-tag paid by Monaco has not been disclosed.

Mostly it underlines that trying to push as an individual against a surging tide is hopeless. Principled, one-man-stands of linguistic resistance against the crypto(currency) craze are futile at this particular juncture of its technological development. Spam with no end in sight would worry the will of anyone.

So apologies also to the few folks who have written to complain about incorrect use of “crypto” in TC headlines. Using “cryptocurrency” is indeed more accurate if that’s what the story is about. But as a term it’s headline-unfriendly as well as being really quite a horrible mouthful.

And, well, “coin” is too generic unless you’re coin trade press.

Alternative linguistic confections — anyone for ‘cryptoc’? — were never going to fly. So cryptocurrency colloquially colonizing “crypto” was really only a matter of time, given how many joules of attention-energy are being claimed and drained in its name.

Turns out language change can have plenty to do with the price of Bitcoin.

On the flip side, any craze can be a fleeting thing, and it’s entirely possible that, in time, “crypto” could revert to its proper meaning of cryptography should the cryptocurrency hype die back, as hype is wont to do when people get bored — because something that was new and novel becomes properly understood and adopted (and thus less of a conversation starter).

Sustained acceptance can make tongue-tripping nicknames less necessary, and reset the linguistic order.

Equally, though, a nickname can stubbornly stick around for ages — outlasting any nonprofessional understanding of the logic underlying its coinage.

Or at least until evolving usage causes another terminology shift. Think, for example, of the rhythmic swings of “telephone” -> “phone” -> “mobile phone” -> “mobile”.

Crypto(currency) could ultimately even lose the ‘crypto’ prefix should the technology end up becoming so ubiquitous as to be considered synonymous with the generic term “currency”, and usurp/displace that word, sinking back into the accepted conceptual morass that envelopes the idea of money.

Of course the crypto(graphy) community have not been at all happy about the linguistic sands shifting treacherously under their foundational field.

And they do have a point, given that without their founding crypto there could be no, er, ‘crypto’…

“”Crypto” could mean encryption, cryptography, or cryptology, but never cryptocurrency,” one computing academic tells us, adding: “I’ve heard plenty of whinging about the changed meaning of “crypto” and I don’t expect a dignified fall-back.”

“Normal usage says “encryption” is only one application of “cryptography” (building schemes for encryption and similar apps) which together with “cryptanalysis” (trying to break such schemes) makes up “cryptology”,” he adds.

Certainly, don’t expect the original crypto community to migrate to alternative terminology — not willingly, and not anytime soon. Which will probably make for some confused messaging at times. But technology applying pressure points to human communications is just par for the course.

As recently as last month the content on Blaze’s (now former) website included the express declaration that: “This site does not trade in or provide services related to cryptocurrencies. It is concerned with cryptography, computer and network security, and technology policy research.”

It further capped that caveat with an explicit disclaimer — writing: “Warning: Many cryptocurrencies are scams, and I strongly advise against their use as investment vehicles.”

Visitors to crypto.com now will not encounter any such caveats. But most of these folks probably weren’t headed there looking for cautionary tales. Nor seeking Blaze’s contact details. So you really can’t blame him for moving with the times.

For the original crypto community, playing the long game and waiting for the upstart crypto usurper to get linguistically cut back down to size seems the best option.

Sure, they’ve lost this “crypto” war — but many more important crypto wars remain to be fought and (hopefully) won.

And of course, in the far-flung future, who knows how 2018’s crypto craze will be viewed? Perhaps as the pinnacle of a hype-cycle that didn’t end in the wholesale reconfiguration of business and society that the crypto oracles promise, even if they managed to shift the conversation of a certain IT crowd for a while.

On another level, given rising levels of tech-fueled disruptive uncertainty crisscrossing so many facets of life, perhaps it’s fitting for “crypto” to become something of a cipher itself, devoid of fixed meaning.

“Encryption technology is the key to the future of the information revolution,” wrote Blaze in 1996. “It allows businesses and individuals to communicate securely over any inexpensive communication platform without fear of eavesdropping.”

That sentiment at least remains constant.

VC firm SparkLabs launches a security token to let anyone invest in its accelerator programs

Ardent crypto enthusiasts believe ICOs and cryptocurrencies will replace venture capital, but what if VC investors absorb crypto into their existing operations?

That’s the thesis that SparkLabs, a U.S.-Korean firm that runs multiple global funds and early-stage accelerator programs, is putting to the test with the introduction of a security token today. The firm said it is aiming to “democratize” investment opportunities by essentially allowing anyone to buy into two of their accelerator program via the token, which will essentially let them become LP-like investors.

SparkLabs’ team’s past successes include Siri (sold to Apple) and DeepMind (sold to Google), and it claims a portfolio of over 160 startups from more than 60 countries. Its accelerator program has graduated over 80 companies, 80 percent of which the firm said have gone on to raise funding at an average of $3.5 million.

The experiment covers two of SparkLab’s new accelerator programs: a six month IOT-focused initiative in Korean smart city Songdo and Cultiv8, an accelerator for agriculture and food tech in Australia.

The firm has already raised capital for both initiatives — $5.6 million for Cultiv8 and $500,000 for the IOT program — but it is aiming to bring in at least $6 million from the token. That’s the minimum sale, while the hard cap is $30 million.

SparkLabs is working with two crypto platforms to handle the token sale in terms of KYC, operations and tapping into audiences. They are Argon Group, which has a community of crypto investors, and Swarm, a platform that connects retail investors with crypto opportunities in PE and VC funds.

ICOs and tokens are in a precarious position in the U.S. while the SEC conducts an investigation into companies that raised money via ICOs and investors who backed them. Wary of that, SparkLabs is primarily targeted non-U.S.-based investors, but it said that the token is open to accredited investors in the U.S..

Unlike traditional LPs, who wait on the fund’s lifecycle to see financial returns unless they can sneak a secondary share sale, SparkLabs plans to introduce liquidity by listing the token on security exchanges in the future. That’ll make it tradeable. But the firm doesn’t advise U.S.-based investors to trade it since that is almost certain to violate the law.

Despite the legal grey areas, the firm is keen to experiment with a token, having backed a number of crypto-based companies via traditional equity investments since 2014 and also launched its SparkChain fund.

“We think the ICO market is here to stay, it’s an avenue for fundraising [that] we think will be complementary to Series B and Series C rounds,” SparkLabs co-founder and partner Jimmy Kim told TechCrunch in an interview. “As a fund, we believe in this space, and we thought we might as well dip our toes into the water and test it out.”

A number of 500 Startups’ recent batch of companies banded together to offer their own security token earlier this year, but SparkLabs may be the first established firm to adopt the strategy officially. Already it is seeing strong interest from crypto hedge funds and individuals who are looking to diversify their crypto assets, Kim said, but the theory is fairly untested so it will be interesting to see how it is received by the wider market.

Certainly, it could be the first of many.

“We’re opening the doors to investors that we wouldn’t usually reach out to,” Kim explained. “If it works out well, we’ll obviously do it with other funds in the future.”

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.