The Clearing House Real-Time Payments Tracker October 2023

Report: Funding Round Cuts Valuation in Half app’s latest funding round has reportedly cut its valuation by more than half.

The cryptocurrency exchange announced Tuesday (Nov. 14) that it had raised $110 million in a Series E round led by Kingsway Capital. A report by Bloomberg News citing a source familiar with the matter says the new financing values at under half of the $14 billion it reached last year.

That was before a downturn in the crypto market left the company and others like it on shaky ground. announced in July of last year that it was letting go of 150 people — a number that amounted to a quarter of its staff.

Those layoffs followed the company’s $270 million loss to Three Arrows Capital, a crypto hedge fund that had an estimated $10 billion in assets and made a number of extremely risky bets on decentralized finance projects such as the Terra/LUNA algorithmic stablecoin.

The company cut another 28% of its workforce earlier this year, joining a number of other crypto firms in shrinking their staffing levels.

“The crypto ecosystem is facing significant headwinds as its course corrects from the challenges of the last year,” said in an email to Coindesk in January. “To better balance product offerings with demand, we’ve made the difficult decision to reduce operating costs and headcount to rightsize the company.”

The Bloomberg report notes that the company’s new funding round is a sign that investors have gained more confidence in the crypto sector, as bitcoin’s price has risen in anticipation that exchange-traded funds investing in the currency will be approved.

However, a recent research report by JPMorgan Chase questions the excitement about the possible approval of spot bitcoin ETFs.

The enthusiasm is based on the idea that the approval would both draw new investors to the crypto markets, and would soften the attitude of the Securities and Exchange Commission (SEC) attitude toward digital currencies.

But JPMorgan analysts wrote that they are skeptical about both arguments, predicting that it’s more likely that existing money will move from current bitcoin products into ETFs rather than new investors jumping on the crypto bandwagon.

And while the SEC has suffered some recent courtroom losses, “it is far from clear that the regulatory tightening of the crypto industry will lessen significantly going forward given how unregulated this industry is,” the report said.