SFOX, a cryptocurrency dealer that offers trading services for institutional investors, has closed its Series A funding round at $22.7 million.
The leading investors in the round, Tribe Capital and Social Capital, were announced yesterday. SFOX also received contributions from Airbnb Co-Founder Nathan Blecharczyk, Danhua Venture Capital, Digital Currency Group, and Y Combinator, among others.
I’ve been waiting to discuss this investment for a while. @SFOX is the most interesting investment in crypto I’ve seen since @DCGco and $BTC itself. This company is worth paying attention to…Excited to have invested. https://t.co/e4Wwj6cOza
— Chamath Palihapitiya (@chamath) August 16, 2018
The firm says that the funding will be used to create and launch asset management services for cryptocurrency and to increase the company’s offices and staff.
SFOX Targets Institutional Investors
SFOX was initially founded in 2014, and describes itself as “a cryptocurrency prime dealer for large-scale investors such as funds, family offices, and high-net-worth individuals.”
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The firm assists high-volume traders in fulfilling their buy and sell orders by integrating with a variety of exchanges. SFOX has reportedly processed $9 billion in transaction volume to date and has reported a 1200 percent growth in its number of clients just this year.
Arjun Sethi, SFOX co-founder and partner at Tribe Capital, said that SFOX works to boost trading liquidity while simultaneously minimizing the impact of high-volume trading on the crypto markets. Sethi sees the lack of market liquidity in the crypto space as “one of the most significant barriers to institutional cryptocurrency adoption.”
Akbar Thobhani, CEO of SFOX, echoed Sethi’s sentiments: “we continue to observe sustained and increasing demand from institutions that want to include cryptocurrencies as part of a diverse portfolio but are reluctant to do so because of uncertainty and volatility,” he said.
— SFOX (@SFox) August 17, 2018
Indeed, a growing number of firms are gearing their offerings toward institutional investors who are interested in the crypto space. Van Eck and SolidX have teamed up to create a Bitcoin ETF that is currently awaiting SEC approval; if passed, the fund will be traded at roughly $160,000 per share.