Uphold and Voxelus co-founder and chairman Halsey Minor. Bitreserve It turns out that the relationship between fintech startup Uphold and the speculative, non-tradable cryptocurrency "Voxel" it's holding in its coffers is more complex than we first thought.

Business Insider reported last month that Uphold was holding $116 million (£81.9 million) in Voxels, a new digital currency issued by a separate company called Voxelus. (The value of the holding has since shifted to $115.95 million.)

Uphold is a "cloud money" platform — it lets you hold, move, and convert money cheaply on its online platform. It caters for 25 currencies, including bitcoin, and 4 precious metals.

Voxelus, meanwhile, is a virtual reality company aiming to build a marketplace for virtual reality goods and objects. The Voxel was created as the "coin of the realm" for this new virtual reality marketplace, yet to be launched.

Voxelus's co-founder and chairman, Halsey Minor, is also the co-founder and chair of Uphold. Voxelus is issuing the new cryptocurrency while Uphold is offering to hold it and build a market infrastructure.

When BI first reported on the deal, Uphold's CEO Anthony Watson told BI there was no conflict of interest in the contract despite Minor's role at both companies. He also insisted that the company had no financial interest in the Voxel's success and said that the Voxels it was holding were held on behalf of clients.

He told BI: "Let's say Voxel goes to zero tomorrow — no one's interested in it, no one wants to buy it. That makes zero difference to us. We're simply holding it in wallets. We're not actively trading it and we're not actively backing the asset either."

"The reason why we have a large amount of Voxel on our platform is because we are the only company, so far, that allows you to hold Voxel in your digital wallet."

But the reality is a little more complex. Subsequent digging around shows that Uphold disclosed in a letter to investors sent out in January that: "In exchange for distribution and support of VOX, the first virtual currency with a clearly defined use case, Uphold owns 15% of the float."

Uphold's 15% stake in all the Voxels issued works out at around $17.4 million (£12.3 million), according to the price currently marked on Uphold's exchange. Currently, the currency is completely untradeable. Seven exchanges will begin trading the currency in early April, according to Uphold and Voxelus, but until then there's no easy way to work out its value.

Minor, chair of both companies, told BI that Uphold is currently marking the stake as zero on its balance sheet. He told us: "We factored zero revenue in. It doesn’t mean we won’t generate revenue from Voxels but for purposes of projecting for our shareholders the answer is no [we're not forecasting revenue]."

Anthony Watson, Uphold CEO. Bitreserve/Uphold So it's technically true that it will make no difference to Uphold if Voxel goes to zero or thereabouts once it starts publically trading. But it will make a difference if the price holds up or rises — something that wasn't immediately clear from our last conversation with the company.

It would make a significant difference in fact. The company didn't disclose revenue for 2015 in its investor letter but says it is forecasting revenue of $15.3 million (£10.8 million) in 2016. Remember, Voxel is currently marked as zero for projections so if it holds up, Uphold's revenues would more than double overnight.

Minor told BI that the cost to Uphold of doing this project has been pretty significant. Uphold is building the payments system for Voxelus that will allow people to buy and sell Voxels and is also building other market infrastructure.

Minor says: "More than half of our engineering team has been working on this almost non-stop for three months. There’s not only a real cost but there’s also a replacement cost from all the other things that we have not been doing. It’s a significant effort to support this. It’s like supporting bitcoin again."

There's also financial risk for Uphold. Minor says: "The 15% was provided [to Uphold] for providing all of the services and taking the financial risk of holding the Voxels, which has been proven by other exchanges like Mt Gox and more recently Cryptsy, as a significant risk. But there’s no better security team on the internet period, probably including all banks, than our security team."

There was no tender process run for the Voxel's support contract but Minor says: "There is no other company [besides Uphold] that can actually do it. If you think about it, the only people that can accept bitcoin, they don’t do what we do. I know the market well enough to know that there isn’t anybody that can do this.

"I’m the majority shareholder and chairman of Voxelus so even if we did [run a tender process] I would be making the decision. Between myself and the employees [of Voxelus] we decided we’d do this."

Despite the costs and risks Uphold faces, Minor says the project is a net benefit to Uphold even if the monetary component of the deal falls through. "While it’s taken time and money, it is a calling card for going out and doing this for other games, for airline miles. So even though it’s a cost, it ultimately creates a very effective use case that Uphold will market."

"What we’re trying to do is innovate. Because I invented both these companies, I can see their intersections and that shows a killer opportunity for both. I guarantee you, you watch how many other companies do what we do after we launch." The Voxel holding detailed on Uphold's transparency page. Uphold Minor is also bullish on the prospects of Voxels once they begin publically trading towards the end of the month and especially when Voxelus' virtual reality marketplace launches (scheduled for October). While it could go to zero, he doesn't think it will.

Minor says: "My opinion has been that bitcoin is not the one currency that’s going to take over the world, it’s really the progenitor, the prototype of what lots of currencies are going to look like. Rather than be geographic, currencies can be industry specific. Currencies are what you believe in."

"The key difference between the Voxel and all these other alternative currencies is the Voxel is the only way you can buy content in the game. If the game ends up having $3 billion a year revenue, that means $3 billion of transactions have to be executed with the Voxel. If it ends up having 300 million who use it then the Voxel currency will have basically the same reach as the dollar has. This currency is going to be needed by everyone who wants to transact."

Uphold's investor letter discloses that the company has so far raised $20 million (£14.1 million) at a valuation of $124.9 million (£88.2 million). Uphold currently has $5.6 million (£3.9 million) of investor funds on its platform, not including the Voxel holding.