Crypto trading platform SeedRX raises $15 million

Wendy
Rhoades (Maggie Siff) coaches hedge fund manager Bobby Axelrod
(Damian Lewis) in the show “Billions.”
“Billions”/Showtime

• Seed CX, a crypto trading platform aimed at
  institutions, says hedge funds are knocking on the door to use
  its services to dive into crypto.
• The firm, which has brought on a number of Wall Street
  heavy weights, announced Wednesday it raised $15
  million. 

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Seed CX, a crypto trading firm in Chicago, has hedge funds
knocking on the door to use its platform, according to cofounder
Edward Woodford. 

The firm, which announced Wednesday a $15 million series B
fundraising round, is currently in the process of onboarding
clients to trade on its spot and derivative trading platform.
Woodford, 25, who co-founded the firm in 2015, told Business
Insider that most of the cash will be used to double its staff to
40 people. The funding round was led by Bain Capital and
OKCoin. 

Already Seed CX has brought on a number of heavy weights from the
Chicago trading world, including Sam Tegal, former head of
liquidity strategy at Jump Trading, and most recently John Hart,
a former managing director at CME Group. 

Woodford said part of the firm’s growth has been buoyed by new
found interest from hedge funds. He said funds are just starting
to get comfortable with the nascent $200 billion market, which is
known for its wild price-swings. 

“They now see it in the same way the see the VIX and
gold,” Woodford said. “One fund manager told me
he wants it as a part of his macro strategy as a hedge against
the broader portfolio.”

Institutional interest appears to be growing in crypto.
Coinbase
recently onboarded a $20 billion hedge fund
and Grayscale, the crypto asset manager, said the first
half of 2018 witnessed its largest institutional inflows
ever. 

The reason for the shift, according to Woodford, is the
trading technology is starting to catch up with what large firms
expect. 

“They need stability,” he said. “A lot of these crypto
platforms are not stable.”
In the finance world
99.99% uptime seems pretty horrendous, but in retail that’s not
such a big deal. And these platforms were born in a retail
world.”

Woodford said out of the number of firms interested in
using the platform, a double digit percentage have never traded
crypto before. 

Still,
uncertainty hands over the market. One crypto hedge funder
told Business Insider that large institutions might be weary
about the regulatory uncertainty in crypto. While the SEC earlier
this year said that ether trading didn’t interfere with
securities law, that doesn’t mean the agency couldn’t go after
the founders of the crypto and early sellers for promoting an
unregistered security, the executive said. 

The agency could also retroactively go after other cryptos
and initial coin offerings, the executive added. 

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