Nasdaq, Fidelity, Bitmain Invest In Cryptocurrency Exchange ErisX

Cryptocurrency exchange ErisX announced Tuesday the closing of its series B funding from a group of investors bridging the divide between traditional capital and digital asset markets. The significant investors consisted of Bitmain (designer of ASIC chips for bitcoin mining), ConsenSys (blockchain software technology company), Fidelity Investments (financial services corporation), Nasdaq Ventures and Monex Group (financial services company based in Tokyo).

The Chicago-based company announced it received $27.5 million in the funding round. However, the individual proportion of the firms’ investments was not disclosed.

“With increasing financial support from leading edge firms, ErisX stands to provide the most robust, secure and regulated digital asset offering available to both institutional and individual participants. Closing this second round of funding enables us to continue building our modern platform and expand our team," Thomas Chippas, CEO of ErisX, said in the press release.

The cryptocurrency exchange intends to manage an intermediary-friendly, Commodity Futures Trading Commission (CFTC)-regulated futures exchange (which is already registered) and clearing organization (registration pending), as well as a spot market for digital assets.

“Many of our customers have been seeking various hedging solutions and would be happy to see U.S. regulatory-compliant exchanges like ErisX provide spot and futures’ contracts in one platform. We are confident that our customers will find this strategic partnership beneficial," Jihan Wu, founder of Bitmain, said in the press release.

According to the ErisX’s website, it will offer both spot cryptocurrency trading and futures contracts, with primary support for bitcoin, bitcoin cash, ethereum, and litecoin. The company plans to offer spot contracts in 2019 and plans to offer futures and other options products beginning late-2019, after it receives CFTC approval to operate as a derivatives clearing organization.

ErisX also plans to get individual state licensure from all 50 states in the country, which will allow investors to trade on the exchange, using fiat currency, throughout the U.S.

“The formation of ErisX is an important step in continuing the convergence of digital and traditional asset classes in global institutional financial services. We are excited to invest and to be working with the extremely credible team. We look forward to seeing ErisX drive significant growth in institutional flows in both spot and futures digital asset markets in 2019," Joseph Lubin, CEO of ConsenSys and cofounder of ethereum, said.

ErisX had earlier raised investment from retail brokerage TD Ameritrade, high-speed trading firm Virtu Financial, and options exchange CBOE (the first U.S. exchange to list bitcoin futures products). Fidelity had announced a cryptocurrency custody service for institutional traders, while Nasdaq (the world’s second-largest stock exchange) had said it will list its first regulated crypto 2.0 futures-type contract in early 2019.

Shares of Fidelity closed 2.75 percent lower Tuesday on the New York Stock Exchange, in line with the overall NYSE Composite Index which closed with a fall of 2.83 percent.