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Crypto Fundraising Platform Legion Taps Blueprynt to Foster MiCA-Compliant ICOs in EU
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3 weeks agoon
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adminCrypto fundraising platform Legion announced Monday that it has teamed with startup Blueprynt to add compliance solutions that enable developers in the EU to comply with MiCA rules when conducting token sales—without relying on a slew of lawyers.
Blueprynt founder and CEO Chris Brummer told Decrypt in an interview that the partnership centers on driving down compliance costs. Whether it’s drafting white papers in a proper format, or coloring them in with on-chain data, he described Blueprynt as an end-to-end solution.
“My goal has been to free up entrepreneurs to concentrate on their vision and put their capital toward its best use,” Brummer said. “Blueprynt is basically developing software to translate regulatory requirements into a very user-friendly process.”
While white papers have a long-standing history in settings such as academia, they’ve become a staple for developers explaining how their projects work in the crypto space. At the same time, Brummer, a Georgetown University Law professor, said that white papers can serve as a means of developing investor interest, with varying degrees of accuracy or attention to detail.
Under Markets in Crypto-Assets Regulation (MiCA) rules in the EU, white papers became a requirement for projects selling tokens or raising capital as of June, with a robust set of disclosure requirements and minimum standards. For small projects, Brummer said that the costs associated with producing a compliant white paper can become prohibitive, easily pushing upwards of €50,000 (about $54,000).
Blueprynt aims to streamline the process of extracting and formatting on-chain data, creating white papers that can be reviewed by lawyers on an accelerated basis. Brummer estimated that the cost of complying with MiCA was reduced through Blueprynt by 70% in practice.
Founded in 2021, Legion aims to provide retail investors with better access to on-chain fundraising efforts. Effectively, it’s putting a regulatory compliant spin on Initial Coin Offerings (ICO), first popularized by Ethereum in 2016, alongside billions thrown at other projects.
Last week, Legion unveiled an investor scoring system, enabling founders to assess prospective investors’ contributions to other projects. Alongside the tie-up with Blueprynt, Legion founder Matt O’Connor said that the fundraising platform is further democratizing on-chain raises.
“Today’s market is full of projects that are capital rich, but community poor,” he said in a statement. “With MiCA-compliant white papers and a licensed platform for retail investors, teams can now include value-add users at the earliest fundraising stages.”
In the U.S., ICOs are largely unregulated, while the Securities and Exchange Commission (SEC) has called upon token issuers to come in and register. Carrying the risk of litigation, Brummer described the process of issuing tokens in the U.S. as a high-stakes scenario.
“It’s not easy,” he said. “The requirements that are in place don’t always fit the instrument, and that does neither regulators nor investors very much good.”
While the registration process in the U.S. could ask projects about their corporate governance, it doesn’t cover decentralized governance through DAOs. Additionally, audited financial statements could be an area of focus, while core crypto aspects like tokenomics aren’t.
Depending on whether digital assets regulation is passed following the U.S. presidential election, as some lawmakers have promised, regulatory requirements could shift soon. Meanwhile, Brummer described standardized white papers as a nod to crypto’s roots in the EU.
“They’re are many different ways in which information provided by projects will be coming under some kind of regulatory oversight,” Brummer said. “We started with the white paper because it was a great sort of proof-of-concept—the Europeans have been very forward-looking.”
Edited by Andrew Hayward
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Battery Finance
Newmarket Capital Launches Battery Finance, Bitcoin-Collateralized Loan Strategy
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2 hours agoon
November 25, 2024By
adminNewmarket Capital recently closed the first investment deal for its new Battery Finance loan strategy, which enables borrowers to incorporate bitcoin into long-term financing structures as collateral.
On November 7, 2024, Newmarket Capital, an institutional capital manager and Registered Investment Adviser completed a refinancing for the Bank Street Court apartment in Old City, Philadelphia, PA. The loan was collateralized by both the building and approximately 20 bitcoin.
Newmarket Capital CEO Andrew Hohns is excited about not only setting his company’s new strategy in motion but the symbolism in the deal.
“It’s a building that is located less than half a block away from the first bank of the United States,” Hohns told Bitcoin Magazine. “Philadelphia has had a lot of firsts and innovations over the years, and we’re proud to contribute another one to the list.”
How The Battery Finance Strategy Works
Battery Finance enables bitcoin to be used as 10% to 30% of the collateral for loans alongside traditional assets. To bring this new strategy to life, Newmarket Capital partnered with Ten 31 to establish Battery Finance, a majority-owned subsidiary of Newmarket Capital that utilizes bitcoin in financing structures.
Unlike other lending companies that let clients borrow against bitcoin with a risk of liquidation in the event that bitcoin’s price drops below a certain threshold, Newmarket Capital removes the risk and offers loan structures without a mark-to-market trigger.
“As lenders, we are constructive on the long-term value of bitcoin and comfortable recognizing bitcoin as collateral without mark-to-market risk,” said Hohns.
“We achieve this by incorporating bitcoin as a component of a broader collateral package alongside traditionally financeable assets. In this way, we have improved our downside through the introduction of bitcoin, an uncorrelated element — an asset that has had such a strong history of appreciation over time — in the collateral package.”
Deals that employ this strategy can be structured differently. In some cases, a borrower can use bitcoin they’re already holding as collateral for a loan, while, in other cases, Newmarket Capital and the borrower purchase bitcoin as part of the loan’s structure. The latter is how the loan for the Bank Street Court building was structured.
“It’s a $16.5 million building, and we offered the building owner a $12.5 million loan,” explained Hohns.
“The use of proceeds was to pay off the existing financing, which was $9 million, to provide them with approximately two million dollars of CapEx for certain improvements to the property they wanted to make,” he added.
“With the remaining $1.5 million dollars, we purchased just shy of twenty bitcoin as part of our combined collateral package.”
(At the time of writing, that bitcoin had already appreciated 30% in value since it was purchased for the loan.)
Unlike traditional loans which often lock borrowers in with prepayment penalties or a make-
whole, the Bank Street Court financing can be paid off at any time with no penalty. To allow for this outcome, the borrower and the lender align to share appreciation on the upside from the bitcoin over the life of the loan.
The longer the loan is outstanding, the greater the share of bitcoin appreciation that vests for the borrower, incentivizing borrowers to take a long term view on the bitcoin.
Although the loan can be repaid at any time and the building released, the earliest that the bitcoin can be wound down is four years, in line with bitcoin’s four year rhythm. The loan carries a single digit interest rate and has a maturity of 10 years.
Bringing Forward Bitcoin’s Value
Hohns, a Bitcoiner himself, understands that other Bitcoiners have a low time preference, that they prioritize future economic well-being over more immediate gratification. However, he acknowledges that there are limits to this approach, which is why Newmarket Capital created the Battery Finance strategy.
“The lowest time preference is not feasible for humans, because we have a finite life,” he said.
“There’s a point where we want to accomplish things with our lives. We want to grow our business or start a new business or just do the things that we all have passion for, like opening up a MakerSpace or a brewery or a bookstore — whatever the case might be. If you’re just HODLing the Bitcoin, you’re deferring those dreams,” he added.
“By offering this financing tool, we can essentially serve as a mechanism to transform those time preferences, to bring forward the appreciation of the bitcoin by offering a significant amount of financing to accomplish whatever the real world goals borrowers have.”
Target Borrowers
Battery Finance is currently focused on working with borrowers who are interested in acquiring or refinancing commercial properties.
“For the time being, we’re inviting interest around loans that are, generally speaking, $10 million to $30 million dollars, which include 10% to 30% percent bitcoin with 70% to 90% percent traditionally-financeable income-producing assets,” explained Hohns.
“This is a tool for both asset owners that want to redenominate some of the equity in their
existing portfolio into bitcoin and its also a tool for Bitcoiners who want to obtain stable long-term financing supported in part by their bitcoin to acquire assets in the real world. This way, they can generate income and accomplish their goals while remaining invested in bitcoin.”
In time, Battery Finance plans to service a broader range of customers.
“We see broad applicability for this lending structure, including, over time, to people that are at different phases of their Bitcoin savings journeys,” said Hohns. “I hope that these kinds of products will develop into solutions that enable people to do things like finance a house or automobile with their bitcoin.”
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MicroStrategy Boosts Convertible Notes Offering to $2.6 Billion to Buy Even More Bitcoin
Published
5 days agoon
November 20, 2024By
adminMicroStrategy’s thirst for Bitcoin cannot be quenched, despite holding over $31 billion worth.
Barely two days after announcing a plan to sell $1.75 billion worth of convertible notes as a means to buy up more of the world’s top cryptocurrency, the firm said on Wednesday that it has expanded that offering to $2.6 billion worth of notes.
Michael Saylor, MicroStrategy’s co-founder and executive chairman, said the move was made due to “high demand” for the new notes over the last 48 hours.
Given high demand, we upsized our $MSTR offering of 0% convertible bonds due 2029 from $1.75 billion to $2.6 billion, including a $400 million greenshoe option, and priced it at a 55% conversion premium.
— Michael Saylor⚡️ (@saylor) November 20, 2024
As with those initially offered on Monday, the additional zero-interest senior notes announced today will mature in 2029 and are available only to qualified institutional buyers. They will be eventually redeemable for cash, MicroStrategy stock, or a mix of both.
That’s a mighty tempting offer for many Wall Street investors, given the recent, explosive growth of MicroStrategy’s stock. The company, which owns over 331,000 BTC—1.58% of the token’s total possible supply—has seen its stock balloon by over 870% in the last year, in the wake of Bitcoin’s surge. Earlier this month, the stock reached an all-time high.
If MicroStrategy manages to raise another $2.6 billion to buy up more Bitcoin, it would be able to purchase some 27,450 BTC at current prices.
While MicroStrategy once billed itself as a business intelligence and software company, the company’s bold Bitcoin wager has upended not just its value to shareholders, but also the way it now sees itself: as the “world’s first and largest Bitcoin treasury company.”
Edited by Andrew Hayward
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Marathon Digital Issues $850M Convertible Note Sale to Repurchase Debt, Acquire Bitcoin
Published
6 days agoon
November 20, 2024By
adminBitcoin mining company Marathon Digital Holdings (MARA) is issuing $850 million in convertible notes, with the option to expand to $1 billion, as part of plans to repurchase existing debt, acquire Bitcoin, and fund corporate initiatives amid a recovering crypto market.
The Fort Lauderdale, Florida-based firm said Monday it plans to use $199 million of the expected $833 million in net proceeds from the sale to repurchase $212 million of its existing 2026 convertible notes, according to a statement.
The remainder will be allocated to acquiring additional Bitcoin and for general corporate purposes, including working capital, strategic acquisitions, expansion of assets, and repayment of other debt, the company said.
Convertible notes are a type of debt-based financial instrument that a company sells to raise capital. The notes are typically converted into equity shares at a later date, enabling investors to hold partial ownership of the company.
Marathon’s latest offering comes as several firms globally begin acquiring and holding Bitcoin on their balance sheet following a market rally that has catapulted the price of the world’s oldest crypto to more than $94,000.
The most prominent include MicroStrategy, holding up to $30 billion in Bitcoin, and Japan’s Metaplanet, which has scooped up more than 1,000 BTC this year, worth roughly $93 million to date.
Meanwhile, Semler Scientific (SMLR) acquired nearly $18 million in bitcoin earlier this month, the company said in a statement.
Starting December 1, 2027, holders of Marathon’s convertible notes can ask the company to repurchase them for cash, though terms may change if major events like mergers, acquisitions, or delisting occur.
The notes, which mature on March 1, 2030, can also be converted into cash, MARA stock, or a mix of both, the company said.
The Bitcoin miner’s stock traded at $19.86 on Tuesday, up 9% on the day, while its after-hours price remains little changed, Google Finance data shows.
Edited by Sebastian Sinclair
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