Bitcoin Boom Makes Aussie a Paper Billionaire as Crypto Jumps

The cryptocurrency frenzy has minted another billionaire. On paper, at least.

James Gilbert, the president and largest shareholder of Malibu, California-based Crypto Co., held a $1.1 billion stake Thursday after its stock surged 76 percent. Crypto’s market value climbed to $2.9 billion, after 7,062 shares -- or just 0.04 percent of 19.6 million outstanding -- changed hands in over-the-counter trading.

Gilbert’s stake has increased more than eight-fold this week as bitcoin and other cryptocurrencies continued to skyrocket. Crypto’s stock closed at $149, less than a week after some insiders sold shares for $7 apiece in a private transaction, according to a regulatory filing.

“This is not the kind of attention we wanted,” Crypto co-founder and Chief Executive Officer Michael Poutre said in a phone interview. “We want attention to be on the work we’re doing.”

The stock surge attracted the attention of market operator OTC Markets Group, which added a skull-and-crossbones icon next to Crypto’s stock symbol on Thursday to signal to investors to be extra cautious before buying the stock.

Crypto is investing in and trading digital assets, and developing source code for managing them, according to its regulatory filings. Gilbert, an Australian who previously co-founded startups including one acquired by LivingSocial Inc., helped launch Crypto in January.

Net Assets

The company had net assets of $3.6 million as of Sept. 30 and posted a $1.5 million net loss in the third-quarter, according to a filing.

Gilbert isn’t alone. Crypto co-founder and Chief Investment Officer Rafe Furst now has a stake worth $452 million. A run-up in ether, the digital money of the Ethereum blockchain, helped one unidentified crypto-trader turn $55 million into $283 million in a little more than a month earlier this year, at least on paper.

Cameron and Tyler Winklevoss, the twins who sued Mark Zuckerberg over the genesis of Facebook Inc., said in 2013 that they had bought $11 million worth of bitcoin. That stake is now worth about $1.8 billion.

Source: https://www.bloomberg.com/news/articles/2017-12-07/bitcoin-boom-makes-aussie-a-billionaire-for-less-than-an-hour