at the office of Mt. Gox, an exchange for Bitcoins, in Tokyo, Japan, on Thursday, April 25, 2013. Photographer: Tomohiro Ohsumi/Bloomberg
Digital Currency Group Inc., one of the most prolific investors in bitcoin-related startups, is slowing down its deal-making pace.
“Recently, we haven’t made as many investments in bitcoin,” said Ryan Selkis, director of investments, on stage at the Money20/20 conference running in Las Vegas this week.
Mr. Selkis cited several concerns about the sector, including increased compliance costs to launch a digital-currency-based startup, as well as the difficulty seeded startups will face in raising Series A rounds from venture capitalists. He also referred to “systemic risks” in the bitcoin market.
New York-based Digital Currency Group is itself a startup, launched by Barry Silbert, the former CEO of SecondMarket. DCG, which operates an investment arm, as well as a bitcoin over-the-counter trading firm, raised a round of funding that it announced this week from venture investors such as Bain Capital