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Anchorage Raises Millions in Series C

The digital asset custody firm pulled in enough to basically start its own bank. Conveniently it holds an OCC charter.

Last month Anchorage became the first cryptocurrency firm to secure a federal banking charter and closed an $80 million Series C round that was led by Singapore sovereign wealth fund GIC. Crypto investing mainstays 16z and Blockchain Capital, and also Lux and Indico, and contributed funding.

Anchorage, which counts former US Federal Reserve Governor Kevin Warsh and famous hedge fund manager Stanley Druckenmiller as advisors, is a digital asset custody firm, meaning that it holds other companies’ cryptocurrency for them. However, it goes beyond mere storage, letting the clients quickly move funds, stake assets to earn the interest, and join in protocol governance.

Series C investments are for established companies that look to scale so that they can reach new markets and/or make acquisitions. Anchorage co-founders Diogo Monica and Nathan McCauley stated in a Medium post today that the money will “help us help institutions participate in new ways.”

There is a lot to do on that front. “Being the first national bank places us at the overlap of two systems—the legacy financial system, and the emerging world of digital assets,” wrote Mónica and McCauley. “We’re committed to partnering with a wide range of financial institutions to make it easy and secure to offer crypto services.”

It then wants to bring aboard more institutional clients as firms like Tesla and Square gobble up big portions of Bitcoin, and also add more crypto assets to its menu of options for clients; it now holds 38 different coins and tokens, ranging from Bitcoin to 0x.

Last January, Anchorage had won a trust charter from the Office of the Comptroller of the Currency (OCC). Since then, it has been able to form “Anchorage Digital Bank.”

The benefit for Anchorage has been recognized as a qualified custodian of assets by the US Securities and Exchange Commission. The charter also means that Anchorage no longer needs to comply with 50 different states’ processes for money transmitter licenses.

$80 million is an ample sum for a late-stage crypto startup. Crypto lending company BlockFi pulled in around $50 million from a 2020 Series C; Coinbase, which today had filed financial statements ahead of becoming a publicly owned company, snagged over $75 million from a Series C in 2015.

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