ClearToken, the first horizontal clearing house for the digital asset market, has received over $10 million in investment from institutional participants, underlining the importance of regulated clearing infrastructure to drive the next stage of growth in the market. Support for ClearToken’s mission this far has come from firms including Laser Digital, the digital asset subsidiary of Nomura, several global liquidity providers including Flow Traders and GSR, and leading digital asset firms LMAX Digital and Zodia Custody

Clearing infrastructure is a critical enabler to the institutional adoption of digital assets, including tokenised and cryptoassets. Strong institutional support for ClearToken demonstrates the demand for traditional financial market infrastructure in digital asset markets to increase adoption, enhance fair and orderly markets, reduce systemic risks, and protect investors. There is a desire by institutional investors to increase allocations to cryptoassets1 but the lack of segregated and regulated market infrastructure has held back their participation.

The benefits and market efficiencies achieved through centralised clearing in traditional markets do not need to be forgone by institutions to participate in digital asset systems underpinned by decentralised protocols. By enhancing market structure, ClearToken will support further institutional adoption, helping the digital assets market, currently capitalised at $2.6 trillion2 , to realise its full potential.

ClearToken will offer the benefits of horizontal clearing and settlement for digital assets and is committed to advocating for the implementation of a comprehensive supervisory framework for digital assets as set out in its recent White Paper – “Creating Financial Market Infrastructure for Digital Assets: Securing Tokenised and Cryptoasset Trading”.

ClearToken intends to be fully regulated in the UK and has initiated the process of obtaining clearing house recognition from the Bank of England, with the intention of launching CCP services in 12-18 months. During 2024, ClearToken intends to launch preliminary settlement services, subject to the receipt of required approvals from the Financial Conduct Authority and Bank of England.

Benjamin Santos-Stephens, CEO of ClearToken commented: “We are delighted with the institutional reception to ClearToken from both established institutional investors, who play a significant role in traditional markets, as well as digital asset pioneers, all of whom have understood the value which ClearToken can bring to digital asset markets.

It is also a fantastic endorsement of the UK’s leadership on digital asset regulation that ClearToken has attracted inward investment from firms across the US, EU, and Asia. Our investors have recognised that the UK government’s progressive legislative program to recognise and regulate digital assets enabling their safe adoption, combined with the UK’s existing position as a global leader in clearing services for securities markets, makes the UK the ideal jurisdiction to host the first digital asset Clearing House.”

Matt O’Neill, Global Head of Business Development, Flow Traders, added: “Flow Traders believes continued institutional adoption of digital assets requires built for purpose market structure with clearly defined roles and responsibilities. ClearToken’s approach to developing a central clearing solution will contribute positively to counterparty risk management, capital efficiency, and addresses some of the key challenges market participants currently experience. We are delighted to be an investor and strategic partner to ClearToken and look forward to actively supporting the development of their offering.”

Quynh Ho, Head of Venture Investment and Corporate Development, GSR, remarked: “With the aim of reducing counterparty risk and fostering wider institutional adoption, ClearToken is paving the way for a more robust and inclusive digital asset ecosystem. GSR is delighted to be an investor and supporter of ClearToken’s mission.”

Olivier Dang, Head of Ventures, Laser Digital commented; “Together with industry leaders, Laser Digital is delighted to continue to support ClearToken in its mission to strengthen and improve the structure of the digital asset market.”

Jenna Wright, Managing Director, LMAX Digital, added, “As a regulated institutional exchange established off the back of our experience in FX – one of the original financial markets formed to bring order to the evolving economy – we recognise the importance of robust, institutional grade market structure to drive growth. We welcome ClearToken’s clearing capabilities which will support the development and maturation of increasingly tokenised financial markets.”

Julian Sawyer, CEO of Zodia Custody, said: “The future viability of the digital asset ecosystem will only come from close collaboration between infrastructure providers. Effective clearing is a significant piece of the overall puzzle — which is where ClearToken steps in. Zodia Custody’s investment here is a bet on the institutional future of digital assets, and the ability of the ecosystem to deliver the infrastructure, without compromise.”

Source: ClearToken