The U.S. state of Wyoming continues its stampede into the new frontier of digital assets and related mining efforts. On Thursday, a crypto assets bank startup Avanti Financial Group announced the closing of a $37 million Series A financing round. Proceeds of the round will be used to fund Avanti’s required regulatory capital needed for launch, as well as to fund engineering build and other operating expenses. According to Avanti–which has raised $44 million in venture funds to date, but is not yet servicing any customers–the offering was upsized twice due to market demand.
Avanti’s Series A shareholders include a global mix of institutional investors, cryptocurrency companies and family offices, along with company executives. Institutional investors include 1843 Capital, AP Capital, Banca del Ceresio, Binance.US, Coinbase Ventures, ECMC Group, Equity Management Associates, Greybull Stewardship, Hard Yaka, HashKey, Holon Global Investments, Lemniscap, Madison Paige Ventures, Morgan Creek Digital, PJT Partners, Slow Ventures, Susquehanna Private Equity Investments and The University of Wyoming Foundation. PJT Partners acted as sole placement agent for Avanti.
Avanti’s successful capital round was announced just one week after Wyoming’s State Senate took steps toward passing a so-called “Decentralized Autonomous Organizations Supplement” (“DAO”), which, if adopted into law, and pending actions from the state’s Minerals, Business and Economic Development Committee, would make Wyoming the first U.S. state to provide legal clarity of the status of companies designated as “decentralized organizations”–i.e., organizations managed by computer-encoded rules. The DAO measure was sponsored by Wyoming’s Select Committee on Blockchain, Financial Technology and Digital Innovation Technology.
Last fall, Wyoming’s Division of Banking granted a special purpose depository institution (SPDI) charter–which is, as the name suggests, a “special purpose” regulatory status that does not incur FDIC insurance–to crypto firm Kraken.
“I’m really thankful that Kraken looked past Los Angeles and really understood that a small state, business-friendly, great tax environment, that was the place to bring new innovation,” Wyoming Governor Mark Gordon told CoinDesk at the time of that landmark regulatory nod, indicating that support for a crypto-friendly regulatory regime enjoys support from the state’s highest executive level.
Avanti describes itself as “a Wyoming bank formed to serve as a compliant bridge to the U.S. dollar payments system and a custodian of digital assets that can meet the strictest level of institutional custody standards,” one that complies with the terms of the Wyoming SPDI charter, as well as the Bank Secrecy Act, federal “know your customer,” anti-money laundering and related laws and regulations.
“As Bitcoin and digital asset markets mature and financialization network effects take root, there is a tremendous need for both well crafted laws and experienced, competent operators. When surveying the globe, in my opinion, Wyoming best meets these needs generally, and the Avanti team specifically is among the most potent institutional-quality human capital,” said investor Trace Mayer, who formed the consortium that led Avanti’s Series A and is an early Bitcoin adopter and investor in Bitcoin industry infrastructure. “Avanti is extremely well positioned to competently answer questions that most in the industry have not even thought about yet.”
“We thank our investors for helping Avanti build a new breed of bank that services Bitcoin and also offers meaningful API capabilities for U.S. dollar transactions to tech-savvy customers,” said Caitlin Long, Avanti’s founder and CEO. “Our roadmap includes offering API-based U.S. dollar payment services for wires, ACH and SWIFT; issuance of our tokenized, programmable U.S. dollar called Avit; and custody and on-/off-ramp services for bitcoin and other digital assets.”
Long said Avanti has received more than 2,500 inbound customer inquiries since announcing receipt of our bank charter in October 2020, and is hoping to begin serving customers later this year.
Bitcoin mining has also proved irresistible to the state’s traditional commodity extraction industries. Earlier this month, it was announced that Wesco Operating, an oil and gas producing subsidiary of Wyoming’s Kirkwood Companies that operates 500 different oil fields in the Western states of Colorado, Montana, Utah, North Dakota, Nevada and Wyoming, had installed flaring mitigation systems (produced by a startup called EZ Blockchain) to convert surplus natural gas produced by flaring into electricity, which is used to power crypto mining operations.