Mike Novogratz is still saddled with hundreds of millions of dollars in paper losses on his crypto portfolio, but he hasn't given up on the space yet. The former Goldman executive's Galaxy Digital Holding is launching two new funds, both aimed at accredited investors with little experience in crypto (something to help justify the higher fees), according to Bloomberg.
The billionaire investor is reportedly planning to target "the wealth of America" - that is the 'mass affluent' of Americans who have between $2 million and $25 million in assets (and the firms that represent them) who would like to diversify their portfolios, and those with even more wealth to invest. The vast majority of Americans between the ages of 50 and 80 stayed on the sidelines during the crypto bull run, Novogratz claims. And it's time somebody showed them a way in.
According to BBG, Novogratz isn't wrong. Bitcoin investors have always skewed younger and more tech savvy. Galaxy is hoping to convince everyone else that bitcoin is a worthwhile long-term hold, at a price point that's lower than the Grayscale Bitcoin Trust, pretty much the only tried-and-tested fund that offers exposure to bitcoin at a markup.
Galaxy is trying to design a fund that can "plug into existing infrastructure," which we imagine means fit nicely into the sales pipeline controlled by financial advisors and the big wirehouses.
Here's what Galaxy's head of asset management told BBG.
"The existing landscape for accessing Bitcoin is incomplete," Steve Kurz, head of asset management at Galaxy Digital, said in a phone interview. "We are trying to offer secure service providers, low fees, simple access to Bitcoin. We wanted to create something that could plug into the existing infrastructure."
Still, the stakes for the Galaxy Bitcoin Fund are pretty high. Galaxy's bitcoin fund requires a $25,000 minimum investment and funds can only be withdrawn quarterly. The other fund, the Galaxy Institutional Bitcoin Fund has weekly withdrawal periods and a higher initial buy-in. The funds are being seeded with Galaxy's money (whatever's left of it) and some of Galaxy's initial investors participated as well.
Novogratz believes that more traditional financial services firms will offer bitcoin services in the next 12 months, and hopes he's getting a head start.
With gold prices on the upswing, Novo hopes his new bitcoin funds might benefit from the flight-to-safety momentum that's emerged as of late.
"You are seeing Bitcoin way outperform other coins right now, and I think that will continue until these coins start to get used for things," Novogratz said. "You also get more credentialed people - there are probably 20 billionaires I could name that made their money outside of crypto and are in crypto now. Every speculative asset needs people to tell the story, and people are buying the story."
Novo has been foretelling the mainstream wealth advisors' eventual embrace of bitcoin for years now. And now he's putting his money where his mouth is. But if he can't win over the big institutional clients - endowments & etc. - this could be another major money loser for Novo.
Documents allegedly leaked by the Ukrainian General Prosecutor's office to CD Media have shed light on payments from Burisma Holdings to Rosemont Seneca Bohai LLC, a corporation controlled by Hunter Biden partner (and fellow former Burisma board member) Devon Archer.
Archer was Yale roommates with John Kerry's stepson Chris Heinz - the two of whom opened investment firm Rosemont Capital with Joe Biden's son, Hunter. Rosemont Capital is the parent company of Rosemont Seneca Partners, LLC - the entity which receive the Burisma payments and in turn aid Biden.
The newly leaked records show 45 payments between November 2014 and November 2015 totaling $3.5 million, mostly in increments of $83,333.33. The payments correspond to Morgan Stanley bank records the New York Times reported on earlier this year - submitted as evidence in a case against Archer who was convicted in a scheme to defraud pension funds and an Indian tribe of tens of millions of dollars. Archer's conviction was overturned in November by a judge who felt that he may not have willingly participated in the scheme.
Rosemont Seneca Bohai LLC is owned and operated by Devon Archer, the Kerry Family including John Kerry Senior, John Kerry Junior, Heinz Jr and Hunter Biden.
All of whom are also listed as partners in the Rosemont Seneca Fund and other affiliated Rosemont Seneca companies.
Leaked transaction and bank records indicate an influx of large payments from Ukrainian energy company Burisma Holdings Limited to Rosemont Seneca Bohai LLC, in what appears to be monthly payments of $83,333.33.
What's more, there are several payments from "Wirelogic Technology AS" and "Digitex Organization LLP" in the amounts of 366,015 EUR and $1,964,375 US based on credit agreements - while $1,150,000 went to Devon Archer and Hunter Biden.
Looking through the Rosemont Seneca Bohai bank records reveals that it was essentially a slush fund used for payments to Biden, expensive toys, an investment in the ill-fated Indian tribe scheme, and other miscellaneous expenses.
On September 25, 2014 a wire of $15,000,000 was received from Florida attorney, Clifford A Wolff. It was subsequently used to buy a $15 million bond from Wakpamni Town Center - the scheme linked to Archer's overturned conviction.
It is unclear why Rosemont Seneca had so much skin in the game. Via the Wall Street Journal:
Hunter Biden’s work in Ukraine and China has attracted criticism from President Trump and other Republicans. In an unrelated fraud case from last year, his name was invoked as a selling point in transactions that turned out to be fraudulent, although Mr. Biden‘s lawyer said his client knew nothing about it.
The case involved a $60 million securities fraud based on bonds issued by an economic-development company affiliated with a Native American tribe in South Dakota, according to prosecutors’ statements in a federal trial in Manhattan last year.
The proceeds were supposed to be used to build a distribution center and other projects, but were instead diverted for the personal use of Jason Galanis, prosecutors said prosecutors said, describing him as the scheme’s ringleader. Mr. Galanis and others also sought to use the bonds to advance a strategy that involved buying up financial firms to merge them into a larger one called Burnham Financial Group, in a deal called a “roll up,” according to prosecutors.
You can flip through the rest of Rosemont's bank statements below:
Is Russia going to start the final global crackdown on crypto?
Crypto is back in the news again, with the price of Bitcoin rising as high as 11,400 it’s now being discussed on a number of levels. New service providers like Blackwatch Digital are stepping up and providing services such as secured and insured crypto, brining institutional liquidity into the Blockchain ecosystem. While the fad came and went, serious coders have been building a high quality enterprise grade system that’s now being rolled out.
Russia’s Ministry of Internal Affairs is reportedly working toward implementing a new law that would allow law enforcement to seize Bitcoin and other digital assets, beginning in 2021, according to Russian news outlet RBC. Specifically, the new law would allow police to seize computers, hard drives or mobile devices containing cryptocurrency wallet addresses from individuals suspected of a crime. From there, authorities could then search through the contents of the devices and see about accessing the wallets and the cryptocurrencies they might contain.
This is interesting, considering that some say that the Russian government uses a complete abuse of power when it comes to assets they want to seize, or powers they want to do. You can read this post “Secret Life of a Foreign Agent” at Navalny.com to get an idea of graft, Russian style. Could the Crypto law be one of the biggest re-thefts in Russian government history? Interestingly, Russia has been a hotbed for Crypto. There are thousands of Crypto millionaires, mostly around Moscow, that 10 years ago were living on coins. Many of them now make traditional investments, some of them even in Pre IPO Unicorns. But what’s interesting about this Crypto law is that it seems that the Russian government is going after tokens. Why? It’s clear that due to the Russian Disaspora, and their refusal to tax the oligarchs, there are less and less tax bases to live off. State oil is the golden goose but as the Arabs have learned, you need a vibrant diverse economy, you can’t just live off the oil. That’s why countries like Qatar, Saudi Arabia, United Arab Emirates, and others – have diverse programs encouraging foreign investment into their barren desert oil rich lands. They are resource rich but culturally poor. Russia has become the same. Their spoils and resources are many but they are culturally poor. Russia is not an innovation hub. Consumer fraud is rampant. The funeral industry is so corrupt, filmmakers were threatened when making a documentary about it. Life in Russia is well, not like the 80s, it’s like the 1880s. “Oligarchs” (read: Fake Tsars) are living in posh mansions in communities like Rublyovka; and meanwhile the average pensioner doesn’t have enough money for food and healthcare.
Growing protests in the streets of Russia are growing in size and in power. Previously they were small in numbers, but as the numbers grow – Russian officials are doing more to stop them. Thousands of protestors have been arrested on fake charges, kept in jail for the ‘maximum’ 30 days in many cases, in order to frighten more people to protest.
And it’s not just in Russia – there are mass protests going on all over the world, including Hong Kong, Lebanon, and sporadically in the European Union (France, yellow vests). But what’s unique about Russia – they still are not part of the ‘one world system’ and so what happens in Russia is uniquely compelling. Meaning that, to contrast it with the United States where there are ‘protests’ – in the US it has been found that many protestors are in fact ‘paid to protest’ employees of financier George Soros. You can bet that protestors in Russia are not paid, and they are demonstrating at their own personal risk. They can be arrested, put on a blacklist, injured, or worse. Thugs likely hired by or working with the government will go into peaceful offices and literally beat and stomp on political protestors to the point complete humiliation.
The dye is a common antiseptic in Russia and has been used in protests there and in Ukraine. "It looks funny but it hurts like hell," Mr Navalny tweeted.It is not clear who carried out the attack, which happened near the offices of the Anti-Corruption Fund (FBK) that he founded. According to one report (in Russian) he was diagnosed with a chemical burn to the eye.
Could this Bitcoin move be an asset grab, as the government needs funding for the next wave of antidisestablishmentarianism? Not only that, Russia is now filling a void left by US forces leaving Syria, or as we might say colloquially, trapped in between a rock and a hard place. Russia has been supporting the Assad regime in Syria for a number of reasons, but now faces proxy enemy Turkey who is a close ally to Russia. It seems they will soon learn what is the real cost of useless foreign wars in the middle east, a complex region with 1,000 year old blood feuds genetically passed down from generation to generation. The conflict between Jews and Arabs goes back way before the United States even existed. Many ask, why does the US get involved? It’s certainly not about Oil, as there is plenty of Oil in the US and Canada to fuel the next generation of alternative fuel development. We all know the answer to that question but it’s the topic for another article. Some say that the US military is the first form of artificial intelligence:
If Russia is cracking down on Crypto including seizing assets you can bet this is part of a larger strategy. And there are many external factors to consider, because Russia has been a unique pro-Crypto country, the government has even subsidized Bitcoin mines with cheap energy. An FSB officer said “America had the internet – Crypto is ours (Russia).. “
Clearly, Russia will not make such a move without a clear calculated plan, as they are not desperate for money and are one of the only major superpowers without any external debt. They have domestic problems but on a macro level they are not suffering. They are not acting out of weakness.
Would other countries follow the lead if this were to happen? Would this be the beginning in a series of anti-Crypto laws in the last independent country in the world? Only time will tell, but we should stay tuned to this developing scenario very closely, as it will have global impact.
