A new Bitcoin exchange was launched on November 11.
Under the name of itBit, the financial startup announced it has raised an additional $3.25 million in capital from VC funds and angel investors to open an institutional-level global Bitcoin Exchange based in Singapore.
itBit, which has raised $5.5 million in total capital as of yesterday, aims to attract institutional investors and commercial businesses to invest in Bitcoin by offering professional exchange levels of reliability, liquidity and regulatory compliance, traits that many say other Bitcoin exchanges are currently lacking and have proved a roadblock for institutional investors.
To establish its reliability, itBit claims to employ NASDAQ exchange technology, allowing it to handle trading volume at orders of magnitude higher than the combined total volume of Bitcoin traded globally. itBit’s network is hosted on Amazon and Microsoft Cloud services, which enables it to easily increase capacity if needed, and achieve a service standard of sub-100 millisecond transaction times. The new exchange boasts a defense-in-depth security with multiple layers of DDoS attack mitigation, a problem that has plagued Bitcoin exchanges in the past.
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The new exchange will be the first to operate on a maker-taker pricing model, which according to itBit, along with its advanced market-making techniques, will result in deep market liquidity. itBit additionally claims that, unlike what it calls its “not-ready-for-primetime” predecessors, its market-making partners share the revenue of the exchange, incentivising them to add liquidity to the market without profiting from client positions.
No indication was given as to what these techniques are that enhance liquidity in Bitcoin trading, or who are the exchanges’ market-making partners or liquidity providers.
In an apparent effort to ease the concerns of compliance officers in banks and institutional financial firms from taking a risk on Bitcoin, itBit claims its Know Your Client and Anti Money Laundering procedures significantly exceed current standards, and that it takes a proactive approach to ensure its operations are always in full regulatory compliance with the laws of Singapore where it is based, and with the laws of its users’ home countries. The exchange will utilize Thomson Reuters’ technology for screening and suspicious activity monitoring, and partnered with Jumio for identity verification.
itBit also accepts retail investors and offers Bitcoin wallet capabilities, allowing clients to store and access their Bitcoin directly on the itBit platform. Retail investors can reside anywhere in the world except the United States on invest in the exchange, due to the regulations, or lack thereof, regarding Bitcoin exchanges in America.