Wednesday 19 June 2019

Thiel-backed crypto startup pays 6,567pc return

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Alastair Marsh

Billionaire moneymen Peter Thiel, Alan Howard and Louis Bacon have seen plenty of big paydays - but probably none as unusual as this one.

A buyback by Block.one, a cryptocurrency startup, will return as much as 6,567pc to its earliest investors - in less than three years. That translates into $6.6m (€7.47m) for a $100,000 stake, a stunning result any time but especially in a market that crashed in 2018. "Block.one is very much the odd one out in the crypto market," said Tom Shaughnessy, co-founder of Delphi Digital, a crypto research firm in New York.

Block.one stands out because of the scope of its ambitions and size of its balance sheet: it raised about $4bn in the biggest sale of digital tokens. The promise is to help produce key buildings blocks for a new secure version of the internet. The company plans to announce a social-media product in June.

Block.one's assets, including cash and investments, totalled $3bn at the end of February. Most of the company's holdings, $2.2bn, are in liquid fiat assets, with the majority of that invested in US government bonds.

The firm has so far made $174m in venture capital investments, either directly or through its partner funds. All along, Block.one has said the money it raised from selling tokens would be funnelled to developers building out its EOS platform, including a pledge to allocate $1bn to venture-capital firms investing in the network.

Bloomberg

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