April 18, 2018 / 2:35 PM / a month ago

U.S. cryptocurrency project gets $133 million investment from big investors

NEW YORK (Reuters) - A start-up launched by three Princeton University graduates for a new cryptocurrency has raised $133 million from a slew of big investors in a private placement, Intangible Labs Chief Executive Officer and co-founder Nader Al-Naji said on Wednesday.

People walk around the Princeton University campus in New Jersey, November 16, 2013. REUTERS/Eduardo Munoz

Intangible Labs is the creator of basis, a digital currency that aims to maintain a stable price and be usable around the world.

The company’s investors included Bain Capital Ventures, Google’s venture arm GV, venture capital firm Andreessen Horowitz, and Lightspeed Foundation Capital, Al-Naji said. Billionaire hedge fund manager Stan Druckenmiller and former Federal Reserve Governor Kevin Warsh also invested in the company.

The new token is built on the ethereum blockchain and has a built-in mechanism that controls its own supply to keep the price stable, Al Naji told Reuters in an interview.

“Volatility of cryptocurrencies has prevented their widespread adoption,” Al-Naji said. “We are trying to build cryptocurrencies that have all the benefits of crypto but is stable.”

Blockchain, a digital ledger of transactions, underpins cryptocurrencies in general and can be used to track, record, and transfer assets across all industries.

The $133 million sale was structured as a private placement to accredited investors, Al-Naji said. The company is still deciding whether to issue tokens through a public crowdsale, as it is assessing the current regulatory environment, he added.

A global regulatory crackdown on cryptocurrencies has slowed the pace of virtual currency sales as questions mount about their transparency and the risk of scams for investors.

More than 500 digital technology startups around the world have raised funds by selling their own cryptocurrencies, or tokens, that sidestep banks or venture capital firms as intermediaries.

Regulators around the world, led by the U.S. Securities and Exchange Commission, have tightened the screws on token sales of initial coin offerings, by instituting rules and guidelines that are giving investors pause and delaying new offerings.

In an interview with Reuters in October, Al-Naji said the idea for basis, which was formerly called basecoin, originated in June from his blog, Nader Theory, in which he broached the idea of a stable coin that can shrink and grow its supply on the blockchain.

Reporting by Gertrude Chavez-Dreyfuss and Anna Irrerz; editing by Jonathan Oatis

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