Brett Harrison, the former president of the now-defunct FTX US exchange, has closed a $35 million funding round for his new derivatives venture, signaling renewed investor confidence in the sector and continued entrepreneur appetite for crypto-related derivatives infrastructure.
On Tuesday, The Information reported that Harrison’s startup, Architect Financial Technologies, is using the funds to build an institutional trading platform spanning derivatives, stocks, futures and digital assets. Participants in the round included Miax, Tioga Capital, ARK Investment, Galaxy and VanEck.
The new capital follows a $12 million funding round in 2024 backed by Coinbase Ventures, Circle Ventures, SALT Fund and other investors.
The funding comes after Architect received regulatory approval in Bermuda to offer perpetual futures contracts linked to traditional assets such as equities, commodities and foreign currencies. Perpetual futures, or “perps”, were first popularized by BitMEX in the crypto markets and later became a staple on FTX before its collapse in late 2022.
Architect specifically targets professional and institutional traders, offering features such as algorithmic trading capabilities, advanced risk management tools, and support for multiple derivatives. The company plans to expand beyond Bermuda into additional markets, including Europe and the Asia-Pacific region.
Related: Kraken doubles down on US futures with ‘small’ $100m acquisition
Derivatives markets exceed traditional asset trading
Derivatives are generally considered the largest segment of global financial markets. By some measures, the nominal value of outstanding contracts in the over-the-counter and traded derivatives markets is estimated to be in the hundreds of trillions of dollars, eclipsing world economic output by every imaginable measure.
Like S&P Global recorded in the February report, the derivatives market continues to evolve, but liquidity remains a key challenge in many asset classes. Investors are increasingly focused on products with high liquidity and small bid-ask spreads, even as market structures and index-based solutions continue to innovate.
The cryptocurrency sector has widely embraced derivatives, though not without consequences. According to some assessmentsderivatives account for around 75% to 80% of the total trading volume on major crypto exchanges, highlighting their central role in market activity.
That dominance also increased volatility. The risks were evident during the crypto market liquidation event on October 10, which was the largest in history, with $19 billion wiped out in a single day.
Related: VC Review: Big Money, Few Jobs as Funding for Crypto Ventures Drys Up
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