Crypto fims leverage the Special Purpose Vehicles (SPVs) facilitated by the Bnk to the Future platform, an offshore company, without exposing themselves to the regulatory scrutiny.
While many of us might believe that the regulatory inaction is causing crypto companies to go into hiatus, it’s not entirely true! Crypto companies including some giant names like Kraken, Coinbase, and Ripple have leveraged the not-so-famous platform called “BnkToTheFuture” to raise millions of dollars from the investors while effectively managing to stay away from the ambit of the regulators.
As per the report from Decrypt, 90 companies from the crypto space managed to raise nearly $800 million using this platform. The BnkToTheFuture platform mentions Richard Branson as its early investors. Moreover, the platform also claims of giving some extra-ordinary dividends to the investors.
The platform provides complete details of which company raised how much. But before we get into it, let’s look into its modus operandi.
How ‘BnkToTheFuture’ Platform Operates
The BnkToTheFuture platform is registered in the Cayman Islands and basically serves as a broker between the investor and the company raising funds. However, the investor doesn’t directly buy into the company. The platform has employed some complex, specialized and narrowly focused funding vehicles called SVPs (Special Purpose Vehicles).
The SPVs then sell the equity shares on behalf of the company they represent. Thus, the Bnk handles the complete fundraising itself while allowing investors to buy shares in the SPVs. Note that the SPVs are also off-shore registered entities in the Cayman Islands.
This provides the companies an absolute shield from the regulatory constraints faced in different jurisdictions. By outsourcing the fundraising to such an offshore platform, the companies widen their score to raise funds from global investors. Besides, it also facilitates fundraising in different currencies.
The only caveat is that the investors investing in the SPVs should still comply with the investment laws of their countries. Thus, US investors buying shares need to be accredited.
BnkToTheFuture CEO Simon Dixon says that his company acts a typical broker in the entire process. The Bnk takes five percent of the funds “raised to the issuing company” as well as five percent of the investors’ dividends and exit proceeds. So far, both the investors and the companies seem to be satisfied with the Bnk’s working. Sergej Kotliar, a spokesman at Bitrefill, said:
“We have many thousands of customers and superfans all over the world that appreciate what we do. BTTF lets them invest in the round while removing the administrative burden that many small checks would have caused otherwise.”
But not all stories are success stories! Based on the earlier success stories, an unnamed source at the company expected a massive influx of investors but couldn’t raise anything. He added: “whatever challenges we had fundraising were not limited to BnkToTheFuture. Fundraising was never easy.”
Companies Raising Funds On the BTTF Platform
Cryptocurrency exchange Coinbase raised $550,000 from 56 participating investors
Crypto payments giant Circle raised $903,000 from 57 investors
Blockchain startup Ripple, known for its instant cross-border payments raised $1.1 million from 46 investors
Wirex, the Europe-based Bitcoin credit card company raised $162,000 from 88 investors
BitRefill, the crypto gift card company, raised a whopping $2 million from nearly 134 investors
Abra, the crypto investment platform, raised a massive $11.9 million from 140 investors
There are several other companies like BitPay, Bitfinex and ShapeShift has also raised funds from this platform.