UK Bitcoin Exchange Coinfloor Expands, Plans on Launching BTC Fund

London-based Bitcoin exchange Coinfloor plans on raising funds for expansion and launch a Bitcoin exchange traded fund linked to traditional commodities. UK Bitcoin exchange platform Coinfloor announced it will start accepting deposits in USD, euros and Polish zloty.

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UK Bitcoin Exchange Coinfloor Expands, Plans on Launching BTC Fund

London-based Bitcoin exchange Coinfloor plans on raising funds for expansion and launch a Bitcoin exchange traded fund linked to traditional commodities.

UK Bitcoin exchange platform Coinfloor

UK Bitcoin exchange platform Coinfloor announced it will start accepting deposits in USD, euros and Polish zloty starting from Tuesday, reported the Financial Times on October 19.

Coinfloor banks with Poland's largest financial institution PKO Bank Polski, and has admitted that British banks weren't keen in doing business with the company due to the uncertainties surrounding Bitcoin's legitimacy in the UK. Thus, Coinfloor's announced acceptance of Polish zloties is rather a sign of the UK's skepticism regarding digital currencies.

CEO Mark Lamb told the media outlet British banks were considerably hampering the UK's chances in becoming a prominent player in the Bitcoin ecosystem: 

"The Polish Bitcoin market has taken off significantly and is now more than double the size of the sterling market. The [British] banks are very conservative and are not very interested... in something that could be very innovative and disruptive to what they do."

Mark Lamb told the media outlet British banks

Coinfloor is said to be closing a £1m, or US$1.6m fund round in the next month, increasing the company's value to £8m, or US$12.9m. People familiar with the topic told the media outlet the funding round is likely to include current investors such as London-based early stage VC firm Passion Capital, and co-founder of TransferWise and angel investor Taavet Hinrikus

Established in early 2013, the company has since become the world's largest Bitcoin to pound sterling exchanger by volume of currency traded. Lamb said Coinfloor is experiencing a 65% growth of trading each month, and reported an estimate of £1.3m worth of bitcoins being traded the past 30 days. According to the entrepreneur, initiatives and businesses like his, are building the infrastructure that are enabling the country's Bitcoin market to grow.

Further, the company said it was planning to create a Bitcoin exchange traded fund, which will be linked to traditional commodities such as gold, but which could be bought and sold like stocks. The fund will be held in a multisig wallet with physical keys securely held in an underground vault, enabling investors to trade shares, while minimizing hacking risks.

Coinfloor stated there was a significant untapped Bitcoin demand waiting for a regulated and listed investment product. The company is said to be exploring "how and where to launch a physical Bitcoin-backed exchange traded product to provide customers with another route to Bitcoin."

Others have attempted to create Bitcoin EFTs, including the Winklevoss brothers who filled US Securities and Exchange Commission documents in late 2013 to register the Winklevoss Bitcoin Trust. SecondMarket founder and chairman of The Bitcoin Investment Trust (BIT) Barry Silbert, said BIT managed to get by the SEC scrutiny because it was launched as an exclusive trust. The executive said the trust managed to gather assets worth of US $70m as of July.

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