Bittrex Leads $1.5 Million Funding Round in Crypto Trading Platform Over ‘Tremendous Untapped Potential’

Francisco Memoria

Popular cryptocurrency exchange Bittrex has recently led a $1.5 million seed funding round in a South African cryptocurrency exchange called VALR over the “tremendous untapped potential” the company sees in the country.

According to CoinDesk, Bittrex CEO Bill Shihara believe the South African market still has a lot of potential. Investor Michael Jordaan of Montegray Capital seemingly agrees, as he believes VALR’s support for 50 cryptocurrencies will be the most diverse offering in the continent.

He was quoted as saying:

The VALR team has the potential to change the cryptocurrency landscape in South Africa and globally.

The CEO of the South African trading platform, Farzam Ehsani, told the news outlet that it already has 1,500 users signed up, and that a backend partnership it has with Bittrex is set to offer it liquidity and competitive prices for crypto-to-crypto trading.

VALR itself is set to work on getting fiat on-ramps with South African banks during the summer, to give its users a change of buying cryptocurrencies with the South African rand. Ehsani claimed local residents “want their hands on a store of value that doesn’t depreciate the way the rand has.”

He added:

Companies are not allowed to go and buy [large amounts of] crypto from offshore markets. This makes it very difficult for crypto exchanges in South Africa to access liquidity from international market

The country’s fiat currency has notably lost half of its value over the last ten years, and capital control stop citizens from transacting across border over certain amounts. These factors have seen seeing South Africans turn to cryptocurrencies, which often trade at a premium in the country.

Marius Reitz, manager at South African bitcoin exchange Luno, told the news outlet that its user base notably grew to over 2 million earlier this year. The platform is notably looking to expand to 20 new countries in the continent this year.

Ehsani himself noted that VALR’s reach goes beyond South Africa, as its know-your-customer (KYC) checks accommodate traders from “most countries.” The CEO sees remittance payments as a potential use case for cryptocurrencies in the region, as remittance services in the country are expensive.

The South African government has looked into cryptocurrencies in the past. The South African Reserve Bank has, in fact, recently published a paper on prioritizing cryptocurrency regulations.

Overstock CEO Sells Shares in His Company to Invest in Blockchain Projects

Patrick Byrne, the chief executive officer of (OSTK), has recently lashed out at investors who questioned his sale of 900,000 of his ‘founders shares’ in the company. Justifying his move, he revealed he needed the funds to invest in blockchain projects.

According to Business Insider, Byrne recently sent a letter to shareholders after the company’s stock prices plunged over 21% this week to their lowest since 2012, after he revealed he sold 500,000 of his shares earlier this week.

On Friday, the CEO revealed he sold an additional 400,000 shares, meaning he sold over 15% of his stake in the company. Although Overstock’s shares recovered on Friday, May 17, Byrne’s letter to shareholders was notable. In it, he wrote:

I simply had to supplement my nominal salary with stock sales in order to fulfill personal commitments to invest personally in blockchain projects such as Medici Land Governance, along with a need to meet charitable pledges.

The CEO added that he doesn’t plan on giving such an explanation again, justifying that he owes shareholders “staying within the law and not making decisions based on inside information, not explanations of my life and projects outside Overstock.”

He noted that the “unanticipated stir” caused by his sale was unexpected, and added “I had no idea that shareholders would demand explanations of why and how I might want to use my cash derived from my labor and my property to pursue my ends in life.”

Byrne is notably Overstock’s largest shareholder, and noted he told investors a year ago he would be making “significant sales” to fund different projects, including those related to blockchain technologies and, presumably, cryptocurrencies.

In fact, the libertarian sold 775,000 of his shares in September of last year, before this week’s sale. The stock’s price has fallen roughly 90% from its record high in January of 2018, when Overstock was benefitting from its cryptocurrency ventures and accompanying the cryptocurrency market’s performance.

In November of last year, Byrne revealed he had plans to sell Overstock’s retail business and go “all-in” on cryptocurrencies and blockchain technology. The CEO’s plan would see the company focus on its fully-owned subsidiary Medici Ventures, which has been invested in blockchain-related startups, after selling its retail business.

Overstock's price performance over the last two yearsSource: Yahoo Finance

Byrne has notably been battling short sellers targeting Overstock, as the firm competes with the likes of eBay and Amazon. Financial analytics firm S3 Partners has estimated short bets against it stand at $157 million, or 50% of its float. This makes it more targeted by short sellers than 99% of companies in the U.S.

Despite the company’s performance on exchanges, Overstock has since launched its tZERO security trading platform, and was one of the first companies to pay a “portion” of its taxes using bitcoin in Ohio.