Archax, an upcoming cryptocurrency exchange, has finished an $8 million seed round from a range of crypto-focused venture capital firms and trading firms, per a release shared with Decrypt. The firm was initially targeting a $5 million raise.
The round included crypto quant trading firm Alameda Research, and crypto VCs Amnis Ventures, Hudson Capital, Bridgetower Capital, CoinFund, among others.
The release said Archax’s status as a regulated entity and its recognition by the Finance Conduct Authority (FCA), UK’s financial watchdog, as a crypto exchange, custodian, and brokerage, helped it exceed its previous funding goals.
“Getting our FCA regulation in place and building the exchange platform were huge first milestones for us. But we obviously also needed the funding in place to meet our regulatory capital requirements to launch,” said Graham Rodford, CEO of Archax, in a statement.
Warren Wang, CEO of Hudson Capital, a firm that participated in the funding round, shared the sentiment, “It is our belief that the license from the FCA provides confidence and safety to Archax’s investors. Having closed the seed round above target, Archax is ready for a successful launch.”
Archax was the first crypto firm to be listed on the FCA’s newer regulatory directives for cryptocurrency businesses—which come into effect in January 2021—and complies with the security norms set by Europe’s Money Laundering Directive and the Financial Action Task Force.
Under the new FCA regulation in effect from January 2021, retail participants will be barred from trading cryptocurrency derivatives—instruments that track the prices of an underlying asset and offer high amounts of leverage—while crypto firms will be subject to stricter anti-money laundering policies and customer rules.
But some firms, that are choosing to comply with regulations, are staying one step ahead.