Hong Kong’s custodian Hex Trust seeks new funding amid rising appetite for crypto

Animoca-backed Asian crypto custodian Hex Trust aims to achieve profitability, while seeking more funding amid the crypto market recovery.

Hong Kong-headquartered crypto custodian Hex Trust is set to start discussions about raising additional funds later this year, as the crypto market is signaling the potential for a long-sustained rally.

In an interview with the South China Morning Post, Hex Trust co-founder and CEO Alessio Quaglini said the custodian plans to start consultations about structuring “a [new funding] round,” although it is yet to determine whether this would be pursued in the first or second half of this year, as investors remain cautious.

“There’s been a real shift from September and October [2023] till now. We see more trading volumes and we see more appetite for risky assets.” Alessio Quaglini

Established in 2017, Hex Trust foresees a path to profitability in the current year following cost-saving measures implemented in 2023, according to Quaglini. Nevertheless, the custodian faces hurdles in achieving profitability, particularly in light of Hong Kong’s proposed regulatory framework.

Under these regulations, licensed centralized crypto exchanges in Hong Kong must develop and operate their own custody solutions, potentially sidelining third-party custodian services like those offered by Hex Trust.

Nonetheless, Quaglini says he’s more concerned about the proposed regulation of over-the-counter (OTC) services, where Hex Trust has “a sizeable OTC business” in Hong Kong. The government’s proposal to restrict crypto-to-crypto trades via OTC platforms unless they obtain a crypto exchange license could prompt Hex Trust to explore relocation to more crypto-friendly jurisdictions, the Hex Trust CEO noted.

According to data from Crunchbase, Hex Trust has secured a total of $104 million from 37 investors to date, with backers including Animoca Brands, Ripple, and Liberty City Ventures. The custodian’s valuation surged to $300 million following its latest Series B funding round in March 2022.