Crypto raising a Discovery process

12/02/2018 - 12:27

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A Perth corporate advisory firm is acting as lead manager to raise $US15 million for an Australian cryptocurrency that will make it easier for banks to verify the sources of payments they receive from the growing digital cash market.

Discovery Capital partners Aaron Kidd (left), Adam Santa Maria and Adam Miethke were former investment bankers. Photo: Frances Andrijich

A Perth corporate advisory firm is acting as lead manager to raise $US15 million for an Australian cryptocurrency that will make it easier for banks to verify the sources of payments they receive from the growing digital cash market.

Discovery Capital was appointed to lead the placement for cryptocurrency ‘ivykoin’, a blockchain-based digital payment system where identity verification will be contained within a distributed ledger.

That effectively means it will be much easier to track the sources of transactions, contrasting with other cryptocurrencies where identity is anonymous, making it more difficult for financial institutions to verify who is behind a payment.

The currency’s token is due to be generated by the end of the first quarter of this year.

ASX-listed Change Financial chief executive Ash Shilkin, who was a former Perth resident, is one backer of the technology, and has a managerial role with the ivykoin team.

“Ivykoin has been created to be a more efficient way of sending data and value to banks in a payment system,” Mr Shilkin said.

“Whenever people buy too much cryptocurrency from their traditional bank account or receive too much money into their account, banks globally are obliged to suspend the account.

“The problem is anonymity.”

Banks are effectively concerned about the potential for money laundering.

Mr Shilkin told Business News the first bank has been signed up, with discussions in train with many more institutions.

Discovery Capital partner Aaron Kidd said he expected the raising, currently close to completion, would be oversubscribed.

A former investment banker at Credit Suisse, Mr Kidd said the advisory firm had a series of different mandates in the cryptocurrency space, including two initial offerings.

Discovery was intended to target high-growth sectors, he said.

“Our bread and butter is mining, given our backgrounds, but we are seeing a lot of transaction flow in this space in particular,” Mr Kidd said.

“We are finding our networks translate across the different verticals.”

A further consideration was that ivykoin had gone for a traditional institutional placement to sophisticated investors, for strategic reasons, rather than the initial coin offering option, which involved digital marketing and website subscriptions.

That meant working with people familiar within that field, which was expected to de-risk the process from a regulatory standpoint.

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