Montreal-based digital asset custodian Knøx has secured $8.25 million in a seed round to support its crypto custody service for institutional customers and fiduciaries.
The funding round was led by San Francisco-based venture capital firm Initialized Capital, with the participation of financial services giant Fidelity and venture firm iNovia, Canadian technology-focused news outlet BetaKit reported on Sept. 24. Knøx intends to allocate the raised money to further develop its offerings.
Protection of customers against losses
Knøx’s products are geared to asset management firms, liquidity providers and exchanges, specifically addressing the issue of customers’ protection against losses. Commenting on the matter, Garry Tan, a managing partner at Initialized Capital, stated that “there is a growing appetite for more comprehensive insurance policies covering digital asset custody,” while Alex Daskalov, co-founder and CEO of Knøx, said:
“Entities who have their digital assets managed by a third party deserve the right to insurance. Too often, insurance policies are purchased for marketing purposes instead of transferring the risks that matter. Our insurance program is designed to help fiduciaries meet their obligations.”
Backing of other blockchain startups
In July, Initialized Capital led a $3.75 million seed round for blockchain-powered video game studio Horizon Blockchain Games. iNovia — alongside other major blockchain investors such as Polychain Capital and Digital Currency Group — also participated in the funding round.
This spring, Initialized Capital alongside Pantera Capital, Foundation Capital and Y Combinator, backed the United States-based startup Sparkswap, which aimed to create a decentralized exchange based on the Bitcoin (BTC) Lightning Network.