(Bloomberg) -- The siren song of digital tokens is proving to be irresistible to another venture-capital firm.
Bessemer Venture Partners recently received approval from its investors to buy cryptocurrenies. While this doesn’t mean that the Silicon Valley firm is going to rush out and put 20 percent of the fund in the space, partners at the firm say they wanted to have the option of deploying capital in the rapidly developing corner of the fintech market.
“We started looking at the digital space about four years ago, but there weren’t very many strong management teams so we decided not to make any investments,” Alex Ferrara, a New York-based partner, said in an interview. “Now, we’re going to be looking for examples of tokens where the token itself is a fundamental part of the business model,” he added, saying this is one way of protecting against investing in riskier tokens.
Investors have poured more than $3 billion into initial coin offerings this year as the price of more established digital currencies such as bitcoin and ethereum soared. The U.S. Securities and Exchange Commission warned investors earlier this year about possible scams involving public companies that claim to be affiliated with ICOs.
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