Startup Exchange Sees Trillion Dollar Opportunity in Combining Digital and Traditional Assets
Blockworks exclusive: The new exchange is seeking regulatory approval in jurisdictions including El Salvador and the United Arab Emirates
Blockworks exclusive art by Axel Rangel
- LibertyEx is in the process of raising a $10 million Series A round. Follow-up round could take the form of a token sale
- The exchange will support both institutional and retail offerings in digital assets, plus alternative and traditional asset classes
A new cryptocurrency exchange that facilitates the trading of digital assets, NFTs and traditional securities is primed to launch, according to sources familiar with the matter.
LibertyEx has in recent weeks started offering over-the-counter crypto trades, the sources said. A broader launch is set for April.
Leading the effort, according to marketing materials obtained by Blockworks, is CEO James Row of Houston-based boutique investment bank Entoro Capital, which has a healthy crypto book.
Row is in the process of raising a $10 million Series A round for LibertyEx. That’s expected to be followed by a $100 million follow-up round, which could take the form of a token sale.
The startup exchange is now in the process of obtaining regulatory approval from jurisdictions including the Bahamas, El Salvador, Switzerland and the United Arab Emirates. It plans to offer about 40 spot trading products at launch, with 20 or so additional new trading pairs set to be introduced each month.
Derivative digital asset trades, which are still in development, are likely set to include perpetuals, futures, options, leveraged tokens and volatility plays. It plans to additionally offer its own NFT (non-fungible token) marketplace, which would support both regulated securities and assets.
Part of the plan includes a so-called “white glove,” turnkey service for institutional investors, who will be able to engage in crypto trading, staking and yield plays and derivatives. The business line would offer advisory services, as well as crypto wealth management.
A market-making business is also in the works — as are integrations with popular third-party DeFi and Web3 platforms.
There’s also pending access to private crypto funds for accredited limited-partners, plus placement-agent and marketing services for digital-asset managers.
The broad idea is to capture multiple alternative and crypto asset classes in a regulatory-approved and know-your-customer-compliant manner — with support for both institutional and retail clients.
LibertyEx has inked a number of crypto service providers as partners, including custodian Fireblocks.
LibertyEx, according to the marketing materials, has pegged its total addressable market at $31.05 trillion, including $1.9 trillion of crypto assets, with the remainder stemming from traditional and alternative asset classes.
The exchange estimates there were 300 million more digital-currency users worldwide last year, along with more than $64 billion of institutional dollars flowing into the space. Venture capitalists, meanwhile, plowed nearly $30 billion into digital-asset startups in 2021, up from $6.5 billion the year before, according to the marketing materials.
The startup also plans to offer banking on-ramp strategies, plus crypto mining services.
At least 14 employees are set to be on board at launch. Among them, in addition to Row: Chief Financial Officer Elias Bahaia Siman, CEO of an El Salvador textiles company; Chief Risk Officer Michael Miller, a former hedge fund professional who has spent time at Oaktree Capital; Chief Operating Officer Paul Mottola, a managing director at Entor0; and Chief Technology Officer Adam Richard, Entoro’s head of crypto.