Binance launches $50m Indian blockchain fund
Binance, a cryptocurrency exchange reportedly based in Malta, has launched a $50 million fund that will invest in “projects and start-ups” in India that will use blockchain technology.
Binance, founded in 2017, is one of the largest cryptocurrency exchange operators in the world. Cryptocurrencies are digital assets that record transactions on a blockchain or a distributed ledger. Binance offers users the ability to trade more than 450 pairs of cryptocurrencies.
Previously headquartered in China and Japan, it moved its operations to Malta in 2018. Last month, however, the Malta Financial Services Authority publicly stated it has not authorized Binance to facilitate the trading of cryptocurrencies. Binance has also stated it has applied for an operating license in Singapore. Vertex Ventures, the VC arm of Singapore's Temasek Holdings, is an investor in the company.
In India, trading of cryptocurrencies is now permitted once more following a recent decision by the Supreme Court overturning an earlier ban on the activity by the Reserve Bank of India (RBI). RBI plans to appeal the judgment. The ban on the provision of financial services to blockchain companies in 2018 had severely crippled the industry.
Partnering with WazirX, a local subsidiary, Binance will support local blockchain start-ups through a fund called Blockchain for India. The vehicle will be backed by digital assets held by the parent company. As cryptocurrencies are volatile financial products, it is unclear whether the amount specified for the fund corresponds to an equivalent amount in various digital assets based on prevailing prices on the Binance exchange.
According to a statement released by Binance, the fund will either acquire primary equity in target businesses or purchase cryptocurrency tokens issued by them with check sizes of $500,000 to $5 million. Blockchain companies usually issue their own form of cryptocurrency that can be used for specified services or traded for a fiat or other types of currencies on exchanges like Binance.
“With this fund, we want to encourage and enable more and more founders and teams to come in and BUIDL [build]. Apart from funding transformative blockchain projects in India, we look forward to collaborating with other investment funds to grow the ecosystem even further,” said WazirX founder Nischal Shetty in the statement.
Other blockchain-related companies that have received venture capital backing this year include Amber Group, a Hong Kong-based start-up offering crypto-based financial services. India’s IvyCap Ventures has also earmarked capital for seed-stage funding in blockchain players through an angel fund launched two years back.
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