Trading Platform STS Raises $30M from CMT Digital and Kraken
Crypto trading platform STS has raised $30 million in a funding round with participation from CMT Digital and Kraken. The investment signals continued venture capital interest in trading infrastructure that utilizes automation and advanced analytics. The new capital is expected to fund product development and integrations.
STS Digital, a Bermuda-regulated trading firm, focuses on institutional clients and offers trading for over 400 digital assets. The firm specializes in derivatives, providing spot markets, options, and structured products. In August 2024, STS Digital expanded its capabilities by acquiring Swiss crypto market maker Flovtec, integrating its trading infrastructure and algorithms. The recent $30 million funding round included not only CMT Digital and Kraken's parent company, Payward, but also Arrington Capital, Strobe Ventures, F-Prime (an investment arm of Fidelity), and BitRock Capital. STS Digital's CEO, Maxime Seiler, and Chairman, Gideon Hyams, have backgrounds in traditional derivatives, aiming to bring institutional-grade risk management and execution to the crypto space. The company anticipates tripling its annual revenue between 2024 and 2025. Lead investor CMT Digital is a Chicago-based venture capital firm that has been investing in blockchain technology since 2017. Its portfolio includes over 150 crypto-focused businesses, indicating a deep-seated presence in the digital asset ecosystem. Sam Hallene, a partner at CMT Digital, cited STS's robust risk controls and significant liquidity in crypto options as key reasons for their investment. For Kraken, this investment via its parent company Payward aligns with a broader strategy to expand its derivatives offerings. This follows Kraken's acquisitions of NinjaTrader, a U.S. futures platform, and Small Exchange, a CFTC-regulated market, to build out its U.S.-based derivatives trading capabilities. The firm also acquired Capitalise.ai to integrate no-code, AI-driven trading automation. The new capital is earmarked to enhance STS's market-making capabilities and strengthen its balance sheet to better handle market volatility. This focus on providing liquidity is crucial for institutional clients who require reliable execution for large trades. The Uniswap Foundation is among STS Digital's current client base. Looking ahead, STS Digital plans to expand beyond its current offerings. The firm has indicated intentions to support tokenized traditional assets, which would broaden its platform to include digital representations of equities, commodities, and foreign exchange. This move signals a convergence between traditional finance and the digital asset space.
