Japan's Recruit invests as crypto co Beam raises $5m

Aki Okamoto Photo: PR

The Mimblewimble based privacy coin raised the money using a Simple Agreement for Future Tokens (SAFT) framework.

Japanese internet giant Recruit reported earlier this week that it had participated last month in an investment in Israeli cryptocurrency startup Beam, which develops a cryptocurrency focused on protecting users’ privacy. Sources inform "Globes" that a total of $5 million was invested in Beam. Among the other investors was Israeli crypto investor Ofer Rotem, who heads the Collider Ventures investment fund.

According to Recruit’s announcement, the Japanese company invested in Beam through a blockchain investment fund that it set up in November 2018. A pioneer of Japan’s internet industry, Recruit focused in its early stages on employee placement, resembling LinkedIn but has grown into Japan’s largest internet company, providing a host of online services.

Beam was founded in March 2018 and issued its cryptocurrency on January 3, 2019. It is headed by CEO Alexander Zaidelson, while a well-known name on Beam’s team is senior advisor Guy Corem, who has founded and headed DAGlabs Blockchain Company, and was one of the founders of Spondoolies-Tech, one of the first Israeli companies to enter the bitcoin mining field.

Contrary to the method used to date by most blockchain companies for raising capital, namely Initial Currency Offering (ICO), the investment in Beam was made in several rounds under the currency which has been issued, according to SAFT framework, (Simple Agreement for Future Tokens). Under this model, the investors receive cryptocurrency issued by Beam on a monthly basis over five years. The further the startup progresses with the development, the currency’s value goes up. Corem told "Globes" that no additional financing rounds will be held under this model after the currency has been issued and if they will be held, it will be under an equity model, which seeks to create business scenarios for Beam’s cryptocurrency and software protocol.

Similar to the currency stolen from Moshe Hogeg

Beam is a cryptocurrency focused on user privacy and is based on Mimblewimble, a new software protocol. Unlike other recognized blockchain technologies such as Bitcoin or Etherium, Mimblewimble stores no private information on the public blockchain used for currency transfer. At the same time, it allows users who prefer keeping an audit trail to be subject to such audits.

According to Recruit, “Beam’s token provides blockchain with a function that prevents disclosing the transaction details to third parties and protects the user’s transaction information, while ensuring transaction control with an option to validate transaction information by a pre-agreed third party.”

The Mimblewimble protocol, named after the tongue-tying curse in Harry Potter books, allows merging cryptocurrency transactions in a manner that prevents detection of their source on a public Blockchain. While Beam is the first cryptocurrency to embed this protocol, it is not alone. Another new cryptocurrency that uses it is Grin.

As reported by "Globes" last month, Moshe Hogeg, owner of the Beitar Jerusalem football club and founder of Singulariteam Capital Investment Fund, reported in a Facebook post that a significant amount of money was stolen from him by fraudulent means when he attempted to buy Grin cryptocurrency over the counter. To date, Hogeg has not disclosed how much money was stolen, but said he is receiving legal advice on how to proceed.

Issued on January 3, Beam cryptocurrency is currently traded with a relatively small turnover at an average price of $1.3 per unit, according to CoinMarketCap. The current price reflects a market of $8 million for Beam. Grin is also traded at relatively small turnovers at $5.1 per unit, reflecting a market cap of $15 million.

Published by Globes, Israel business news - en.globes.co.il - on February 21, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Aki Okamoto Photo: PR
Aki Okamoto Photo: PR
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