Despite the bullish crypto market, Circle is continuing to sell its business. The cryptocurrency startup has the support of Goldman Sachs and plans to focus on its stablecoin USDC by reducing its line of business .
Circle was founded by Jeremy Allaire and Sean Neville in 2013 to bring Bitcoin and other cryptocurrencies into the mainstream.
- Circle's broken arm survives: layoffs, sell OTC department, specialize in stablecoin business
- Crypto data analysis company Coin Metrics report shows that daily transactions in stablecoins reach $ 444 million
Last year, Circle's OTC platform and exchange business Poloniex have been sold, the Circle Pay application has been closed, the research product Circle Research has been discontinued, and its co-CEO has also announced his resignation.
Today, Circle's digital asset investment app Circle Invest has found a buyer, and its equity crowdfunding platform SeedInvest is also looking for a new owner.
Voyager acquires Circle Invest
Circle Invest was sold to Voyager Digital Canada, the operator of digital asset broker Voyager.
On February 12, Voyager announced that as part of this acquisition, it will integrate the functionality of Circle's new stablecoin service into its platform. Voyager will also add 40,000 retail accounts and expand its customer base to more than 200,000.
According to the announcement, most Circle Invest customers are expected to move to the Voyager platform by the end of March 2020. Following this transaction, Circle and Voyager will collaborate on a strategic business plan to provide low-cost payments to the combined Voyager customer base.
In addition, Circle said that the company's retail customers can now use some of Voyager's broker services, such as zero-fee transactions for more than 30 crypto assets. Circle product management director Rachel Mayer noted that the company would be happy to provide Circle Invest customers with "deeper retail investment capabilities."
"Currently, Circle is launching new platform services and products for companies around the world, helping them bring the advantages of stablecoins to their products and developing global business in new and innovative ways."
In addition, Voyager will issue ordinary shares to Circle, representing approximately 4% of the ownership shares. According to TradingView, as of press time, Voyager's share price was C $ 0.45, which was up about 14% in the past 24 hours.
SeedInvest was not spared
In addition to stablecoins, only Circle invests in SeedInvest. However, two sources revealed that the company is considering selling it and is also focusing on new initiatives related to USDC and stablecoin. USDC is managed by a consortium called CENTRE, and Coinbase is also a member of the consortium.
Circle originally acquired SeedInvest in order to realize its vision in the field of tokenization of financial assets and help companies raise funds. According to reports, the acquisition was completed in March 2019. A person familiar with the matter said that Circle had difficulty finding buyers because of the outstanding issues with the structure of the initial acquisition.
"This deal is very tricky; so I believe anyone who sees this deal will reject it because it is not easy to digest."
A Circle spokesman declined to comment.
Insiders who have contacted the company regret the dissolution of Circle. The sale of Circle Trade was the biggest hit. Some sources claim that Circle Trade is actually the company's piggy bank. In 2018, Circle was a powerful company with the most powerful counterparty relationships and managed $ 24 billion worth of cryptocurrency transactions.
Nonetheless, sources said that the company was unable to properly upgrade as resources were allocated to Poloniex and Circle Invest.
Circle's stablecoin dream
As for Circle's next steps, the company has made a new round of changes to its website, suggesting its ambition to focus on stablecoins.
(Modified Circle website)
USDC is a highlight of Circle. Over the past year, its supply has doubled, from approximately $ 252 million in February 2019 to $ 441 million as of press time. However, this is still below the record high of more than US $ 520 million at the end of 2019.
Earlier, Circle planned to provide "crypto banking platform-as-a-service" to companies that want to interact with traditional financial systems. These services can include cryptocurrency custody, risk and identity management, compliance management, and more.
Circle spokesman Josh Hawkins said in a statement:
"Circle is committed to expanding the popularity of Bitcoin in enterprises, including providing corporate business accounts, creating a convenient environment for exchange and deposit, using USDC for payment and settlement, and accompanied by a set of API services, The cryptocurrency platform infrastructure is open to developers. "
"We believe that over time, every enterprise in the world will use and adopt stablecoins, and developers around the world want to use platform services to unlock the potential of programmable currencies."
However, sources said the USDC alliance model could be detrimental to the company. Even if Circle successfully launches USDC-related products, other participants can follow suit.
"All of their IP (Intellectual Property) is shared," a source noted. "If Visa joins the alliance and offers the same services, who do you think people would choose?"