SFOX Raises $23M as a Crypto Asset Management Platform for Institutional Investors
Crypto Startup, SFOX Raises $22 Million To Help Resolve Liquidity Problem In Crypto Sphere
Cryptocurrency prime dealer, SFOX has successfully raised $22 million in its Series A funding round, which supposedly was a combined effort of venture capital firms, Trible and Social Capital, along with contributions by Y Combinator, Khosla Ventures, DHVC, Blockchain Capital, Upside Partnership, SV Angel, DCG, and most interestingly, Co-Founder of Airbnb, Nathan Blecharczyk.
Founded in 2014, SFOX is known for satisfying the needs of large-scale investors, with a transaction volume of nearly $9 billion thus far. Their goal is to ensure that investors get worthwhile prices while trading, whether it implies via crypto exchanges, OTC desks and market markers. This recent fund raising is an attempt to help expand upon their mission in bringing together all crypto exchanges to facilitate efficient trading.
According to the CEO of SFOX and one of the first employees to have onboarded the Airbnb household name, Akbar Thobhani, the lack of liquidity is a result of displaced crypto exchanges.
In particular, he said, “the distributed nature of cryptocurrency has given rise to a large breadth of exchanges around the globe, creating a fragmented market and limited liquidity.” Thobhani believes that a solution does exist, and it entails creating a “single point of access […] by building the necessary smart routing technology to […] connect these global markets and exchanges.”
In other words, investors can trade via a single account, have access to different exchanges and ultimately, have “the ability to buy and sell high volumes without impacting prices,” according to the Co-Founder of Tribe Capital, Arjun Sethi.
This is an important point made, given the fact that past trends have established a relationship between large transfers of cryptocurrencies, which many refer to as the whale movement, and its impact of the crypto sphere. Hence, SFOX’s proclaimed ability to prevent negative fluctuation in prices can be beneficial.
With the funds raised, SFOX plans to not only improve upon their current role as a prime dealer, but also offer a wide range of products which strengthen one’s trading experience. In particular, it was noted that security and risk management products, additional support and the necessary licenses that permit entry to the market will all be provided.
More importantly, the team involved plans to expand globally, as SFOX is only registered in 22 states thus far. This could potentially be done through the prime dealer’s future custodian services that will welcome institutional investors into the crypto sphere.