Startup Exchange sees a trillion-dollar opportunity by combining digital and traditional assets

A new cryptocurrency exchange that facilitates the trading of digital assets, NFTs and traditional securities is about to launch, according to people familiar with the matter.

In recent weeks, LibertyEx began offering OTC crypto trading, the sources said. A wider launch is planned for April.

Leading the effort, according to marketing materials obtained by Blockworks, is CEO James Row of Houston-based investment bank Entoro Capital, which has a sound crypto book.

Row is raising a $10 million Series A round for LibertyEx. This should 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 gaining regulatory approval from jurisdictions including the Bahamas, El Salvador, Switzerland, and the United Arab Emirates. It plans to offer around 40 spot trading products at launch, with around 20 additional new trading pairs to be introduced each month.

Derivative digital asset exchanges, which are still in development, are expected to include perpetuals, futures, options, leveraged tokens, and volatility games. It further plans to offer its own NFT (non-fungible token) marketplace, which would support both securities and regulated assets.

Part of the plan includes a so-called “white glove,” a turnkey service for institutional investors, who will be able to engage in crypto trading, staking and yield gaming, and derivatives. The business line would offer advisory services, as well as crypto wealth management.

A market-making venture is also in the works, as are integrations with popular third-party DeFi and Web3 platforms.

There is also pending access to private crypto funds for accredited sponsors, as well as placement agent and marketing services for digital asset managers.

The general idea is to capture multiple alternative and crypto asset classes in a regulatory-approved and know-your-client compliant manner – with support for institutional and retail clients.

LibertyEx has signed up a number of crypto service providers as partners, including custodian Fireblocks.

LibertyEx, according to marketing materials, has pegged its total addressable market at $31.05 trillion, of which $1.9 trillion is in crypto assets, with the rest coming from traditional and alternative asset classes.

The exchange estimates that there were 300 million additional digital currency users globally last year, along with over $64 billion worth of institutional dollars circulating in space. Venture capitalists, meanwhile, invested nearly $30 billion in digital asset startups in 2021, up from $6.5 billion the previous year, according to marketing materials.

The startup also plans to offer on-ramp banking strategies, as well as crypto-mining services.

At least 14 employees are expected to be on board during the launch. Among them, in addition to Row: CFO Elias Bahaia Siman, CEO of a Salvadoran textile company; chief risk officer Michael Miller, a former hedge fund professional who spent time at Oaktree Capital; Chief Operating Officer Paul Mottola, Managing Director at Entor0; and Chief Technology Officer Adam Richard, Head of Crypto at Entoro.