Seed CX Raises $15m From Bain to Expand Crypto Exchange for Trading Industry - The Industry Spread

Ricardo Esteves

Ricardo Esteves has seen business and economics through many lenses. He joined the Financial Services Industry in 2009, and has been a financial journalist since 2011. He holds a degree in Business Administration and has experience producing real-time news, from both buy-side and sell-side, as well as for retail traders, brokers and service providers. Esteves' work has appeared in a variety of online publications including FX Street and FinanceFeeds.

Bain Capital

Seed CX Raises $15m From Bain to Expand Crypto Exchange for Trading Industry

September 15, 2018

Seed CXCryptocurrency exchange Seed CX, the first licensed virtual asset exchange to offer institutional trading and settlement for both spot market and CFTC-regulated derivatives, raised $15 million in a Series B funding led by the only investor Bain Capital Ventures.

The funding round brought the startup’s total funding to over $25 million to date. The Series A round raised $6 million led by Divergence Digital Currency Fund and the startup raised $700k and $3.4 million in seed funding since 2015.

The latest round of financing will be used to expand Seed CX’s physical trading infrastructure, broaden its network of institutional trading groups, and more than double its team to close to 40 people.

Edward Woodford, Seed CX’s co-founder and CEO
Edward Woodford, Seed CX’s co-founder and CEO

Edward Woodford, Seed CX’s co-founder and CEO, commented:

“The growth of digital assets as an asset class will be based on the adoption of institutional investors and professional traders, who require a trading experience that is on par with that of other instruments, such as equities and commodities. As a licensed exchange for both spot and derivatives trading, we deliver the operational risk safeguards, strong institutional technology, operational support, and regulatory compliance that institutions demand. What is particularly exciting is that our unique offering brings large institutional traders, who have so far sat on the sidelines, into the crypto space for the first time.”

Salil Deshpande, Managing Director at Bain Capital Ventures, said:

“Institutions are seeking regulated, secure, and reliable crypto venues with diverse products that allow them to earn strong returns. Today, trading venues are retail focused, limited to spot trading, often unregulated, and in foreign jurisdictions. The lack of institutional exchanges is the single largest barrier to crypto asset class growth. Seed CX is serving this unmet need of institutions and has assembled an outstanding team of executives to support this vision.”

Besides a pending BitLicense with NYDFS and a pending Broker-Dealer registration with FINRA, Seed CX and its subsidiaries hold a number of registrations and licenses, including Swap Execution Facility (CFTC), Introducing Broker (NFA), Money Services Business (FinCEN), and Money Transmitter (15 states, including Delaware, Illinois, and Connecticut).

Institutional investors and professional traders can use the Seed CX market structure and technology to trade a diverse crypto and fiat product suite, with the ability to integrate with popular institutional order management systems, and easy market monitoring.

Salil Deshpande, Managing Director at Bain Capital Ventures
Salil Deshpande, Managing Director at Bain Capital Ventures

Seed CX also offers fiat and cryptocurrency settlement, with its engine Zero Hash, and custodian services through its proprietary Digital Asset Vault. Market participants are protected through an active regime of trade surveillance, segregated trader accounts, audit trails, and circuit breakers. The matching engine and market surveillance solution used by the cryptocurrency exchange is owned by GMEX.

Bain Capital, the only investor in the Series B funding round with $15 million, is one of the largest alternative investment firms and has helped launch and commercialize more than 200 companies since 1984, including DocuSign, Jet.com, LinkedIn, Rapid7, and SurveyMonkey. Cryptocurrency-wise, the company is invested in Basis (a stablecoin), Compound (money markets for crypto assets), decentralized derivatives companies, and several crypto hedge funds.
In December 2017, BlockEx, a FinTech company developing a Digital Asset Exchange Platform (DAxP) based on blockchain, announced the appointment of Ronald Martin, former Bain Capital, as Chief Operating Officer.

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