Popular US-regulated cryptocurrency exchange Kraken has concluded its funds raise on the online investment platform Bnk to the Future (BF) that was the company raise about $13.5 million from 2,270 individual investors.
Kraken had a hard cap of about $15.4 million that was raised from the previous $10.2 million due to investor demand. According to Simon Dixon, the co-founder of BF, Kraken was raising funds to achieve a company valuation of $4 billion.
Dixon stated as of yesterday Tuesday, June 25th, his platform was waiting on about 250 bank wires from confirmed investors in order to tally the total figure from the fundraising which he estimates will bring the total funds raised to about $14 million still well below the target amount.
Kraken, which self-describes as “the only regulated spot & futures crypto exchange with over $85bn in trading volume in 2018 alone,” is planning to use the funds raised to introduce “additional financial services & products for the blockchain & crypto space.”
The company has recently acquired CryptoWatch, a U.S.-based market data, and multi-exchange trading platform as well as Crypto Facilities, which is a London-based derivatives and futures trading platform. Kraken currently serves about 4 million clients situate across 200 countries making it one of the biggest exchanges in the US.
Interestingly, the money raised from the BF partnership has been pooled into a Special Purpose Vehicle in order to bypass SEC requirements to register the sale of equity to shareholders. The money is now considered coming from a single capital source (BF) that will represent the interests of the 2,270 contributors. This also means that the investors are not considered shareholders and therefore not entitled to shareholder benefits.
However, an email sent to the investors revealed some of the perks that these individuals would be enjoying as contributors to the BF fundraise:
“CryptoWatch Premium membership, the ability to leverage shares for margin collateral, priority service from our client support team, invitation to Kraken’s exclusive investor chat room, subscription to Kraken’s Daily Hash newsletter and OTC Daily report, bi-annual Kraken investor update, beta access to new Kraken products and features, limited edition Kraken swag, [and] 5% investment rebate in KFEE.”
These investors will only be able to realize a return on their investment in special circumstances including a buyout of the company if Kraken lists its shares on the stock exchange or in rare occasions that the company experiences a management buyout.
BF cautioned prospective investors through the platform’s chat room dedicated to the fundraising saying that:
“This is a high-risk high returns platform – please understand this before investing.”