April 19, 2024
GFO-X Receives $20 Million Investment from M&G in Series B Funding
Bitcoin News

M&G Invests $20 Million in UK’s First Regulated Bitcoin Derivatives Exchange, GFO-X

M&G’s investment wing, a division of the UK-based pension fund, has injected $20 million into the inaugural regulated Bitcoin derivatives exchange in the country, Global Futures & Options Holdings (GFO-X). M&G and GFO-X jointly revealed the specifics of this investment, constituting a segment of the derivatives exchange’s $30 million Series B funding round. Initially, the platform will cater to Bitcoin index futures and options contracts.

This move establishes a foundation for conventional financial entities to access a range of cryptocurrency derivative investment products. GFO-X is on track to transform into a Financial Conduct Authority (FCA)-regulated and centrally-cleared trading platform for crypto derivatives.

The investment capital originates from M&G’s cross-over strategy, initiated in a Series B funding round, drawing from the $138 billion Prudential With Profits Fund. The cross-over strategy focuses on patient growth equity for rapidly expanding private companies. The funding seeks to establish a hub for trading and clearing cryptocurrency derivatives while nurturing innovation within the industry. As part of the investment, M&G joins GFO-X’s board.

Jeremy Punnett, a portfolio manager at M&G, emphasized the potential for the UK and London to emerge as leading hubs for cryptocurrency technology and investment. “The lack of regulated trading venues is materially hampering the growth of the digital currency trading market,” stated Punnett.

GFO-X CEO Arnab Sen highlighted the evolving UK and European regulations as pivotal for integrating cryptocurrencies into mainstream financial offerings. However, achieving this outcome requires the incorporation of traditional market structures to address perceived risks linked to this burgeoning asset class. “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,” Sen remarked.

The long-term viability of digital assets and the digitization of real, tangible assets require careful collaboration between traditional market participants and modern innovators. As investor interest in cryptocurrencies continues to surge, the FCA has recently issued supplementary guidelines to industry service providers, ensuring adherence to UK crypto-asset promotion rules. Some operators have chosen to exit the country, while others strive to meet stringent requirements for advertising in the UK.

Image by pixabay

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