SFOX, a San Francisco-based cryptocurrency prime broker, has successfully closed a $22.7 million funding round to build an institutional-grade asset management platform for the industry’s largest investors.
As the former head of growth and business development at Airbnb, SFOX CEO Akbar Thobhani would appear to have struck a chord with some of the most influential figures in Silicon Valley.
SFOX’s Series A round attracted a number of venture capital heavyweights–including co-leaders Tribe Capital and Social Capital; investors Y Combinator, Khosla Ventures, Blockchain Capital; and Airbnb Co-Founder Nathan Blecharczyk.
Feeding the Whales
Catering to some of the most affluent investors in crypto, SFOX claims to have dealt more than $9 billion worth of crypto-assets to hedge funds, family offices and high net worth individuals—or what retail traders would dub the “smart money.”
Since 2014, SFOX has helped clients execute high-ticket cryptocurrency orders presumably in the tens, if not hundreds, of millions of dollars. By simultaneously purchasing from a multitude of exchanges and over-the-counter brokers, SFOX can offer its investors more attractive rates while mitigating the adverse effects of market footprints.
Where so-called “whales” may wish to purchase cryptocurrency on regular exchanges, the sheer size of their orders has been known to cause severe repercussions. As previously reported by CryptoSlate, the largest contract holder on OKEx purportedly caused market-wide chaos when their $460 million long position in BTC was partially liquidated.
Despite the market’s destitute capitalization, SFOX told Bloomberg that institutional interest is unwavering and that their business is growing “rapidly.” According to Thobhani, the new SFOX platform will make it easier for institutional clients to migrate to crypto from traditional assets such as equities.
As previously stated by Coinbase CEO Brian Armstrong, Thobhani believes that Wall Street is on the edge of adoption. He noted:
“More and more Wall Street will want to get involved, but the challenge most of them are having is that the platforms they’ve built for trading things like equities doesn’t transfer to crypto.”
Many investors may hold up the prospective VanEck Bitcoin ETF as the elixir for an institutional injection of capital; however, it would appear that an equally profound infrastructure is unfolding largely unnoticed.
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