UK digital asset custody firm Copper has raised $196 million in Series C funding. While the filings have only been made in the past few days, most of the money was received in the past year. Earlier this year it was reported that Barclays Bank is one of the investors. However, the startup has not formally announced the funding and a recent move by the company indicates that it plans to return some money to investors.

State Street Digital previously announced that Copper would be its technology partner.

The UK regulator the FCA, which provides AML licences, did not grant one to Copper, who withdrew his application in late June after joining the Swiss self-regulatory organisation, VQF. At that time, it moved UK-registered customers to its Swiss subsidiary.

As for the financing first reported by Bloomberg, according to company accounts, it received $127 million of last year’s $181 million, which was initially treated as a loan. Additionally, a $15 million loan was converted as part of Series C.

Plans to return money to investors?

In a relatively unusual move, the company has just decided to convert 100 million pounds ($111 million) of its share premium reserve. This is usually done to allow a losing company to distribute dividends.

We asked Copper about the purpose, but didn’t get a response in time for publication.

The accounts indicated that the money advanced last year had some strings attached to completing Series C. This is complete speculation, but it is possible that certain investors wanted some of the money back, and this is a face-saving move. Another possible reason is that investors needed to book a return to inform their limited partners.

As a custody company, Copper does not display its clients’ digital assets on its balance sheet. Although in the United States, the SEC wants companies to do it. At the end of last year, Copper had £3.3m of its own digital assets. Suppose he held on to them, given the state of the crypto markets, that will be reflected in losses next year. In 2021, the company posted a loss of £10.72 million ($11.9 million).

Meanwhile, two major TradFi institutions went live with digital asset custody this week: BNY Mellon and SIX Digital Exchange.