Jeffrey Berns, eccentric founder of blockchain incubation and investment firm Blockchains.com,
purchased a small community bank in Las Vegas, Nevada in order to
secure financing as he manifests his decentralized dreams, according to The Nevada Independent.
Berns said his ambitions are incompatible with the current financial
system and he feared that the banking complex would cut off his supply
of capital. The 56-year-old attorney previously announced plans to
construct a Reno-sized, blockchain-focused smart city and e-sports arena
in the Nevada desert.
His $28 million acquisition of the Kirkwood Bank of Nevada
“is a small but critical step in helping the nascent company achieve
its wildly ambitious goals,” reported The Nevada Independent. In
addition to financing his own projects, Berns hopes Kirkwood Bank of
Nevada will become a leading bank for the blockchain industry.
“It’s to create an environment where the blockchain ecosystem, the
legitimate businesses out there who are trying to build projects that
are going to empower the individual and better the world… have a bank
that understands what they’re doing and isn’t fearful,” he said.
“Banks are hesitant, because if this takes off, you don’t need banks anymore. They become obsolete,” Berns said.
Berns purchased the bank through a separate holding company to
mitigate the reporting and ownership responsibilities. Additionally, he
said he planned to decentralize his companies in the future, turning
power over to users of the system.
“I don’t think the regulators would have ever been comfortable with
that,” he said, adding he may attempt limited integration of Blockchains
with the bank to create a sandbox to test his financial technology and
blockchain ideas.
“I needed a playground,” he said. “I needed a place to do
proof-of-concept with regulators to show that loans can be done in such a
way that if I have $1,000, I could invest 10 cents in 10,000 loans and,
it would all be done on the blockchain and micro payments would be
made, and there’s no funny business.”
Berns’ negotiation with Kirkwood began in February 2018, after he
spent a year searching for a banking partner. He paid $25 million for
the entity, and invested an additional $3 million.
According to the FDIC
the bank has more than $86.6 million in assets and has had a 9.14
percent return on equity in 2019. It has never changed ownership since
its founding in 2008.
Bank President John Dru said were no immediate planned changes for
banking operations except for the name and a branch opening in Northern
Nevada. It is unconfirmed what the bank’s new name will be.
“I know for sure that the customers won’t see any changes,” Dru said.
“All executive management is staying on board. The directors, there’s
no change there, they’re all going to stay on. And even the account
numbers won’t change.”
Berns also said he plans to buy or create a 3D printing company to
print a portion of his blockchain city. He’s considering using an
undervalued building material – hemp – during the process and may
cultivate the resource on 67,000 acres of land owned by Blockchains.
“It’s environmentally friendly, it sucks carbon out of the air, it
rehabilitates soil and it’s all around an amazing product,” Berns said.
“And we had planned to do it on a smaller scale and after hemp was
legalized, we intend to go much bigger.”
Blockchains recently partnered with slock.it to further its integration within the Internet of Things.
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