C1 Fund – established by a team of former Coinbase legal professionals and investors – has engaged in discussions with numerous local venture firms, explicitly proposing the purchase of private holdings from investors at a discounted rate ranging between 50% and 80% of their most recent valuation.
The development comes as the crypto sector has once again captured the interest of investors, driven by a prevailing bullish stance on Bitcoin. This has resulted in the world’s largest digital asset surpassing $40,000 for the first time in two years, causing prices of various other cryptos to rise as well.
C1 Fund Explores Australian Crypto Landscape
The Australian Financial Review confirmed receiving the presentation document that detailed C1’s approach, focusing on crypto companies that were valued at a minimum of $300 million in their last funding round, preferably at Series C or later stages. C1 expressed its intention to provide funding of around $20 million to $50 million.
The document reportedly reads,
“Due to current market conditions in the public and private markets, hyperinflation, and rising interest rates, we believe the digital assets market offers very attractive valuations in the secondary market.”
C1 Fund has approached various cryptocurrency organizations, including the venture capital firm Animoca Brands, specializing in gaming and the metaverse, as well as Chainalysis, a blockchain analysis entity. In these engagements, C1 has proposed the acquisition of private holdings from investors at a discounted rate ranging between 50% and 80% of their most recent valuation.
Although C1 Fund positions itself as a partner to assist venture investors in unlocking liquidity, there appears to be limited interest among local investors in divesting from investments that have weathered the prolonged downturn in crypto activity over the years.
Shift in Stance?
Australia has adopted a cautious stance towards the broader cryptocurrency industry, especially following the collapse of FTX. The government has proposed a regulatory framework that might extend until 2025 for an Australian digital asset platform to obtain a license. Earlier this year, Westpac implemented measures to protect against scams, including prohibiting users from making payments to the prominent crypto trading platform Binance.
The Australian Prudential Regulation Authority (APRA) also instructed banks to disclose their exposure to ventures and start-ups related to cryptocurrencies. In June, the Commonwealth Bank of Australia (CBA), the country’s largest bank, announced a temporary suspension of “certain” payments to cryptocurrency exchanges as part of newly introduced measures to combat scams.
However, as the cryptocurrency market gains momentum, there are indications that sentiment may be shifting in Australia.
Domestic crypto players such as Independent Reserve and BTC Markets have experienced an influx of new customers after CZ, the founder of Binance, pleaded guilty to money laundering charges last month.
Investors have shifted away from the Binance exchange in favor of locally regulated operators. As a result, the trading volumes of these local platforms increased by up to 50%.