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Goldman Sachs and Barclays Spearhead $70M Funding Round For A Crypto Fintech

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Leading investment banks Goldman Sachs and Barclays are among the few to lead a $70 million funding round for a UK-based crypto trading platform Elwood Technologies, which valued the firm at around $500 million, according to a report by Financial Times.

The funding exercise was supported by crypto-friendly German bank Commerzbank, digital asset investment manager Galaxy Digital and Dawn Capital. Elwood was founded by billionaire British hedge fund manager Alan Howard.

The latest backing is another example of the growing adoption of digital assets despite the prevailing market condition.

Speaking on the financial round, Elwood Technologies CEO James Stickland said the fundraising was “another validation of the longevity of crypto” brushing off the falling prices from the last few weeks:

We’re getting investments from financial institutions that aren’t expecting to get massive returns in 15 minutes. They’re investing in the infrastructure, I think it’s a reassurance message.

Elwood Technologies provides a crypto portfolio management system with crypto market information and trading infrastructure for institutional investors that features an interface that connects to crypto exchanges, liquidity providers, and custodians.

Commenting on the deal, Goldman Sachs’ global head of digital assets Mathew McDermott, stated that the investment reflects its “continued commitment” to cryptocurrencies. He then added

“As institutional demand for cryptocurrency rises, we have been actively broadening our market presence and capabilities to cater to client demand.”

Goldman Sachs’s Massive Crypto Push

Last month, Goldman Sachs [GS] offered its first bitcoin-backed loan which signifies Wall Street’s deepening crypto ties. The banking giant claimed its’s secured lending facility enabled a borrower to use bitcoin as collateral for a cash loan.

Goldman, which has a dedicated digital assets team, traded its first over-the-counter bitcoin options to Galaxy Digital in March.

Looks like the investment firm is following in the footsteps of other traditional finance giants moving further into crypto. A few months ago, Cowen launched a digital assets unit and BlackRock [BLK] participated in the  $400 million funding round for USDC stablecoin creator Circle.

With regards to Elwood, the firm will continue to have Howard as the majority stakeholder, who had been one of the UK’s most prominent investors to take the plunge into crypto markets.

Barclays customers prohibited from carrying out transactions to Binance

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It looks like banks in the United Kingdom like Barclays were complying with the country’s financial regulators by prohibiting any kind of payments to Binance.

Lately, Binance has been subject to a lot of scrutinies from across the globe. As regulators continue to bring the world’s largest crypto exchange down, banks have started to join hands with these regulators. While some banks have just begun embracing the crypto-verse, the latest move by a prominent bank could disrupt these efforts.

London-based bank, Barclays was decisive about supporting the Financial Conduct Authority [FCA]. A couple of weeks ago, the FCA noted that Binance wasn’t permitted to carry out functions in the region. While Binance was dealing with it, Barclays dropped this on the exchange.

Barclays U.K. leaves Binance hanging while it sides with the FCA

The crypto-verse has welcomed an array of people this year. A Twitter user revealed that Barclays had prohibited the user from engaging in any sort of transaction with Binance in the future. The tweet read,

https://twitter.com/PrfctSymmetry/status/1412044825252270088

Barclays UK support page went on to respond to the same with an array of tweets detailing the reason behind its doing. The bank wrote,

“Hi there, It’s our responsibility to help protect your money. With this in mind we’ve taken the decision to stop payments made by credit/debit card to Binance until further notice, to help keep your money safe. For further information on Binance and investing in crypto assets generally, please visit (the FCA website). We’re sorry for any disruption this may cause you. “

Towards the end of June, FCA issued a warning against the Binance Group. The statement clearly mentioned that any entity of the Binance Group would not be able to function in the UK without the “prior written consent” of the FCA.

This was soon followed by statements from, Japan, Canada as well as the Cayman Islands.

After Libra, Regulations Delay Launch Of Digital Settlement Project Led By Banks

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Soon after the world witnessed the evolution of cryptocurrencies, several mainstream companies started pouring into the industry. While a few platforms invested in the existing coins, firms like Facebook and JP Morgan decided to roll out their own. After mainstream organizations, banks started taking a keen interest in developing digital coins. The announcement of the world’s biggest banks collaborating to roll out digital currencies took the world by storm. However, the latest updates suggest a delay in the project.

Regulatory Hurdles Stand Tall Before Digitalization

The Utility Settlement Coin [USC] was a project put forth by the 13 of the largest banks in the world, including Credit Suisse, Barclays as well as Banco Santander. After a while, USC changed into Fnality International and was originally scheduled to roll out this year. However, the project will reportedly launch during the Q1 of 2021.

The project aims at launching digital versions of the U.S dollar, Canadian dollar, the Japanese yen, euro as well as the British pound. While the world was in anticipation of the launch of this project, regulations put a hold on it. The Chief Executive of Fnality International, Rhomaios Ram told Reuters that the project was still in need of regulatory approval.

The 13 banks involved in the project invested a whopping 50 million pounds. The project has reportedly been under development for the past five years and was operated by the USB Group AG. The banks involved in the project intend to steer towards digitalization by limiting paperwork that takes place during the transfer of funds.

This isn’t the first time regulations have come in the way of innovations. Social media giant, Facebook’s crypto venture, Libra is the perfect example of the above statement. The project was constantly subject to scrutiny from regulators across the globe and was delayed. Even though the magnitude of regulatory pressure of the Libra project and Fnality have a huge disparity, seeking regulatory approval has become quite a task. Stressing on the same, Ram added,

“The technology is the least complicated part of this whole thing.”