Crypto derivatives platform GFO-X has raised £24 million ahead of launch.

The trading venue, regulated by the Financial Conduct Authority and also known as Global Futures and Options Ltd, has been backed by £332 billion asset management firm M&G Investments as part of its Series B round.

GFO-X has a strategic partnership with LCH SA – London Stock Exchange Group’s (LSEG) Continental European clearing house – and intends to create a global hub for the trading and clearing of digital asset derivatives. It claims its ‘regulation first’ approach has seen it achieve trust and credibility with the largest institutions.

LCH SA will introduce a new, segregated central counterparty clearing service, LCH DigitalAssetClear, subject to regulatory approval. LCH DigitalAssetClear is focused on counterparty credit, risk management, and the settlement needs of the digital asset derivatives market as institutional products develop.

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“The lack of regulated trading venues is materially hampering the growth of the crypto derivatives trading market,” said M&G portfolio manager Jeremy Punnett. “The UK has the potential to become a global hub for crypto asset technology and investment, making London an excellent destination for GFO-X’s new global trading venue.

“This investment enables GFO-X to scale its operations as the business is set to benefit from investors shifting their trading from unregulated to regulated venues.”

Arnab Sen, CEO of GFO-X, added: “Evolving regulation will bring digital assets into mainstream finance. This transition demands traditional market structures to solve the multiple risks currently associated with the digital asset market. 

“However, building a regulated financial market ecosystem is complex, time-consuming and expensive, and the pitfalls of taking shortcuts are now clear for all to see. The long-term viability of digital assets and the digitisation of real tangible assets requires careful collaboration between traditional market participants and modern innovators. 

“Having a patient long-term capital partner such as M&G is crucial as we build the next generation of global financial market infrastructure for digital assets.”

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