More than 75 companies in the blockchain and cryptocurrency industry collected at least $30 million in payroll loans from the U.S. government.
Loan recipients included Zcash developer Electric Coin Company, Ethereum venture studio ConsenSys and Rainberry Inc., the U.S. entity acquired by Justin Sun’s Tron Foundation at the time of its BitTorrent acquisition in 2018.
Crypto venture firms were also represented on the list, including Polychain Capital and Unchained Capital.
The PPP was created by the Trump administration during the COVID-19 outbreak to help businesses pay their employees during the ongoing economic crisis. The effort was meant to stem layoffs, though some 44 million Americans have filed for unemployment benefits since March.
The loans to blockchain startups are likely to be controversial among cryptocurrency users given the industry’s roots in the liberterian-leaning cypherpunk movement, which distrusted governments and banks. (Satoshi Nakamoto famously embedded a headline about bank bailouts into Bitcoin’s genesis block.) However, not taking an available subsidy arguably might have put any one company at a disadvantage to competitors that did, regardless of what the recipient believes about the policy’s merits, as one industry insider pointed out.
It may have even been a point of strategy. “Every fund has been telling their startups to [apply],” one Silicon Valley investor told CoinDesk in April.
The SBA published data on more than 660,000 recipients from a variety of sectors. Each entry included a range of how much money was received (specific amounts were not published) and the bank that issued each loan.
Loan recipients from the blockchain industry include:
This is a developing story.
Correction (July 7, 22:30 UTC): An earlier version of this article misidentified two of the loan recipients. The R3 LLC that received SBA financing is different than the R3 LLC that develops blockchain technology. SafeChain Solutions is also different from the SafeChain blockchain firm. The Sovrin Foundation was removed after both it and the bank told CoinDesk the transaction never occurred, contrary to the SBA’s database