Investment

New US$50M Blockchain VC Fund Proof of Capital Launches

Proof of Capital website homepage

A new venture capital fund called Proof of Capital was launched on Wednesday with US$50 million in funding. The fund will invest in blockchain startups with a focus on fintech, infrastructure, hardware and consumer products.

The fund was raised last month with backing from the likes of HTC Exodus, a Taiwanese smartphone and consumer electronics manufacturer, YouTube co-founder Steve Chen, and Taiwanese company Formosa Plastics.

Edith Yeung, one of the fund’s founders and a partner at 500 Startups, an early stage venture fund based in Silicon Valley, told TechCrunch:

“Some of these backers are curious at the possibilities of blockchain. For example, they’re giving us some ideas on how tokenization and gamification could be applied on different platforms.”

Proof of Capital has already made its first investment in Ubanx, a Latin America-based blockchain startup that provides an API banking infrastructure for fiat-crypto exchange in Argentina, Brazil and other countries in the region.

Yeung told Reuters that the fund aims to “to meet and build long-term partnerships with founders who want to define this new Internet.”

Alongside Yeung, Proof of Capital, which has offices in San Francisco, Hong Kong and Taipei, counts Phil Chen, the “decentralized chief officer” of HTC and original creator of the HTC Vive virtual reality headset and the HTC Exodus blockchain phone product lines, as well as Chris McCann, who previously founded and led the community program at Greylock Partners, as its founders.

Proof of Capital founding partners Edith Yeung, Chris McCann and Phil Chen

The fund has also inked a partnership with HTC Exodus, which will open the possibility for its portfolio companies to work directly with the manufacturer to develop services and products for the Exodus phones and potentially other HTC blockchain ventures.  

“For HTC, it’s obvious, they already have a product to go with it,” Yeung told TechCrunch adding that HTC was interested in investing in blockchain services and startups to build an ecosystem.

According to the company’s website, Proof of Capital will put an emphasis on “real adoption and global distribution” with a particular focus on Asian and emerging markets. The company said it is looking for “founders who share our ethos and global perspective” which it will support through customer and business development, marketing, branding, and distribution, alongside capital.

Advisors to Proof of Capital include Greg Kidd, the former chief risk of Ripple; Howard Wu, the co-founder of Dekrypt Capital and a cryptography researcher at the University of California, Berkeley; Dominic Williams, the founder of Dfinity; Dawn Song, a Berkeley professor and the founder of Oasis; and Kas Vardhanabhuti, a former trader at the George Soros Fund.

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Economist Behind Claim Russia Will Buy $10 Billion Worth of Bitcoin Said Price Would Collapse to $100 Last Year

Over the past week or two, a story about Russia adding bitcoin to their foreign currency reserves has been reported in a variety of media outlets such as The Daily Telegraph, Fortune, and ZeroHedge. All of these stories cite Vladislav Ginko, who is an economics lecturer at the state-funded Russian Presidential Academy of National Economy and Public Administration (RANEPA).

According to Ginko’s comments on Twitter and in interviews, he believes the Russian government will add $10 billion worth of bitcoin to its foreign currency reserves early this year. The move is said to be a reaction to sanctions imposed by the United States.

When this story was first reported, not many people paid attention or took it seriously, but things started to get interesting as more credible media outlets published articles around the story. Some people thought it was an elaborate hoax, while others have questioned Ginko’s credibility.

The Twitter Account Appears to Be Legitimate

In response to the likes of The Daily Telegraph reporting on this story, some skeptics shared their belief that the source of the news was a fake Twitter account that was not actually owned and operated by Ginko.

Looking at the Twitter account’s history, it appears authentic. For example, there is this tweet from 2012 where the author claimed to be a finance professor who works in New York and Moscow. Additionally, Archive.org’s Wayback Machine shows Ginko was in control of the account in 2014, when he was associated with a Russian financial news outlet.

Bitcoin to $100 or $2 Million?

To be fair to the skeptics, Ginko’s Twitter account is all over the place with bizarre claims being made left and right. For example, the account has recently retweeted a number of photo-including tweets from a local dentistry.

For someone who is supposedly trying to get the Russian government to stack bitcoin as part of their foreign currency reserves, Ginko was not very bullish on the bitcoin price in May of last year when he tweeted that it would dip below $100. By November, Ginko was predicting the price would go to $2 million in 2019.

More recently, Ginko has been tweeting conspiracy theories related to convicted Ponzi scheme operator Bernie Madoff.

So, Will, It Happen?

So, what should everyone make of Ginko’s claims? Well, it is true that Russia has already shown signs of moving away from the US dollar in their foreign currency reserves, and when asked to comment on this topic by The Daily Telegraph, the Central Bank of Russia stated that it “publishes information on the foreign assets management with a six-month lag.”

Having said that, Elina Sidorenko, who runs a working group on the potential risks of cryptocurrencies for the State Duma, does not see any merit to Ginko’s claims.

“Under this statement there is no common sense, let alone ideas that would be considered in the power circles. Today, the Russian Federation, like any other country in the world, is simply not ready to somehow combine its traditional financial system with cryptocurrencies. And to say that this idea can be implemented in Russia is unlikely to be possible in the next 30 years,” Sidorenko told Russian cryptocurrency news outlet Forklog (translation via DeepL).

Combining Sidorenko’s comments with Ginko’s bizarre Twitter antics indicate there is not much credibility to the idea that Russia is about to buy a whole bunch of bitcoin to hold in reserve.

Note: While writing this article, the author realized he is blocked by Ginko on Twitter. It’s possible the block was in reaction to this tweet.