Despite record-breaking amounts raised through ICOs, traditional venture capital (VC) funding continues to flow into the cryptocurrency ecosystem. According to recent funding news roundups, crypto exchanges and wallets are among the biggest beneficiaries, while exchanges themselves are also transitioning from investment targets to active investors.
Chinese Wallet Imtoken Raises $10 Million for International Expansion
Chinese cryptocurrency wallet startup Imtoken has secured $10 million in Series A funding from venture firm IDG Capital. The wallet app reportedly has 4 million users. Financial details and valuation remain undisclosed. Founder Ben He told Bloomberg that the investment will fund international expansion beyond China, where 70% of users still originate. Plans include opening a new office in Singapore and growing the team, which has already tripled to 30 employees over the past year. Imtoken also aims to develop new security features and expand services for institutional investors.
Paxos (Itbit) Raises $65 Million
New York-based Paxos, the company behind institutional bitcoin exchange Itbit, announced a $65 million funding round led by RRE Ventures and Liberty City Ventures. In May 2015, Paxos obtained a trust company charter and launched the first regulated bitcoin exchange in the U.S. Itbit offers both global exchange and OTC trading services. CEO Charles Cascarilla stated: "We will use the capital to grow our settlement business on the Paxos side and the crypto asset exchange and custodian on the itBit side."
Binance Launches $1 Billion Ecosystem Fund
Beyond traditional VCs, internal forces within the crypto ecosystem are also backing startups. Exchanges that profited heavily in 2017 are now becoming investors. Most notably, Binance announced a $1 billion Community Influence Fund and another Binance Ecosystem Fund with 20 future partners. Concurrently, Huobi partnered with Chinese VC New Margin Capital and Korean brokerage Kiwoom Securities to launch a 100 billion won ($93 million) investment fund.
These developments highlight a shifting capital structure: traditional VCs continue to back infrastructure (wallets, exchanges), while exchanges themselves reinvest their bull-market profits into next-generation innovation. For startups, funding sources are becoming increasingly diverse.