The digital money startup called Uphold has landed a $60 million dollar investment courtesy of Federal Reserve Senior Analyst and Ripple Chief Risk Officer Greg Kidd.
Kidd’s track record includes other successful startups, including such as Square, Coinbase, and Twitter.
In addition to investing in the virtual currency platform, Kidd will be joining the company’s board of directors and will help innovate their research and development branch known as Uphold Labs.
Kidd’s investment will help strengthen Uphold’s loss assurance to the tune of 20% of its crypto holdings. That means that users of the Uphold platform will have increased loss protection from cryptocurrency volatility and other risks, such as hackers.
Practically no cryptocurrency platforms offer any type of insurance for their users this feature, so that alone could make Uphold an industry leader.
“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,” Kidd said in an interview.
“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 spokesman for Uphold said that 20% of the funding will be used by the licensing and research department to add different cryptocurrencies to their platform, increase their connectivity to other financial systems and lay the groundwork for Ripple-based projects.
The next 45% will go to equity and the remaining 35% will be shifted to its reserve balance sheet.
The Uphold virtual currency platform offers foreign exchange and international remittances for Bitcoin and other cryptocurrencies. It also provides e-commerce services.
As part of their cryptocurrency expansion, the company will be adding support for Ripple (XRP).
Investors are hoping that the funding and the loss prevention offer will add legitimacy to a product that the market views as explosively unpredictable.