Digital money platform Uphold today announced it has received a $57.5 million investment from former Fed Reserve senior analyst and Ripple chief risk officer Greg Kidd.
Kidd, who will join Uphold's board of directors, will also help fund the creation of a research and development arm, to be called Uphold Labs, through his investment vehicle Hard Yaka. Kidd has previously invested in Coinbase, Square and Twitter.
In a statement, the investor praised Uphold's scalability, as well as its compliance practices.
In addition to forming Uphold Labs, the investment will help fill Uphold's loss assurance to roughly 20 percent of its crypto holdings, protecting its users from potential losses due to cryptocurrency volatility or other issues.
Kidd told CoinDesk:
"Because of the strength of Uphold's compliance and controls, I'm willing to pledge a certain amount of my balance sheet, or the balance sheet of my venture company ... as a reserve. That means that if there was some adverse effect at Uphold that might put it otherwise in a position of operating as a fractional reserve, this is like an insurance program that will make sure that user balances are protected."
A spokesperson for Uphold said the licensing revenue and development wing will receive 20 percent of the funding, which will be used to add more cryptocurrencies to increase the firm's connectivity to financial systems, as well as for use in Ripple-related projects.
Then, 45 percent will go to equity, and the remaining 35 percent will be shifted to its reserve balance sheet.
The partnership will help Uphold provide "unprecedented asset protection," said chief executive Adrian Steckel.
Formerly called Bitreserve, before its rebrand in 2015, Uphold offers foreign exchange and international remittances in bitcoin and fiat currencies. It also provides e-commerce services.
Michael Del Castillo contributed to this article.
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Coinbase and Ripple.
Dollar bills image via Shutterstock
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Kidd, who will join […]