Even though a lot of cryptocurrency enthusiasts are not too fond of Ripple or XRP, there is a lot of merit to this particular digital asset. In fact, Greg Kidd, an early Coinbase investor, is now investing in competing exchange Uphold. His objective is to ensure that the company integrates XRP as well as offers insurance to guarantee that users’ deposits are protected. It is an interesting development that will send major shockwaves throughout the industry.
Uphold Receives $57.7m in Funding
It doesn’t happen all that often that one individual investor decides to throw nearly US$60 million at a cryptocurrency company which already exists. When it comes to cryptocurrency trading platforms, Uphold is a name most people will not have heard of. The platform supports many cryptocurrencies as well as other assets which can be traded. One particular asset missing from this exchange is none other than Ripple’s XRP. Given the recent surge in the XRP price, one would expect Uphold to have added this token some time ago.
So far, that has not happened, but that situation will change in the near future. That’s because serial investor Greg Kidd has decided to give the company US$57.7 million in exchange for adding XRP and offering insurance on all cryptocurrency deposits moving forward. It is good to see someone acknowledge there is a growing demand for more security when it comes to cryptocurrency exchanges. These platforms are a prone target for hackers, and customers often lose funds because of such incidents.
With Kidd’s investment, Uphold will insure user deposits to prevent losses even if a hack were to occur. The remainder of the funds will be used to integrate support for XRP, which should happen in the near future. It is not the first time Kidd has made such an investment in the world of cryptocurrency, as he is also a backer of Coinbase. Prior to that investment, he invested in Twitter, a platform everyone has heard of by now.
Even though some people will consider this investment to be rather manipulative, no one prevents rich people from contributing money to companies in need of funding. It’s apparent that Uphold had plans to integrate XRP well before Greg Kidd showed up, but that will always remain subject to massive speculation. The US$57.7 million investment in Uphold is pretty significant in its own regard, though. The company has been around for nearly four years now, yet it still can’t compete with the likes of Coinbase, GDAX, or even Bitstamp in terms of popularity.
Greg Kidd commented on his investment as follows:
As an ex-regulator, Uphold’s 1% reserves seem thin to me. It’s fine in normal day-to-day operations, but there are a lot of hacks. And a hack could put you out of business. It’s to level the playing field. People just assume Coinbase has enough money and can withstand a hack. But if you’re a smaller exchange, people are like, ‘What kind of assurance do I have if something bad happens?’
With more exchanges supporting XRP, it will be interesting to see what the future holds in this regard. Additionally, the insurance of customer deposits is something no one should overlook either. If all trading platforms integrated such a feature, no one would ever have to worry about platforms getting hacked. Unfortunately, very few companies can do so right now, mainly because they don’t have the financial reserves to insure user deposits. It will be interesting to see if that situation ever changes.