Cryptocurrency exchange Kraken has raised $13.5 million from individual donors through a crowdfunding campaign which attracted 2,263 individual investors. The campaign was organised on an online investment platform Bnk To The Future (BF).
The exchange initially sought $10.2 million in funding. However, it upped its goal due to market interest.
Kraken describes itself as “the only regulated spot & futures crypto exchange with over $85bn in trading volume in 2018 alone.” The exchange wishes to introduce “additional financial services & products for the blockchain & crypto space.” It previously acquired U.S.-based market data and multi-exchange trading platform CryptoWatch and London-based derivatives and futures trading platform Crypto Facilities.
Simon Dixon, co-founder of BF said the exchange needed the funding to reach a $4 billion valuation, CoinDesk reports. Investors wishing to view the breakdown of the valuation allegedly needed to sign a nondisclosure agreement.
Kraken receives the investment in the form of a Special Purpose Vehicle. Therefore, the individual investors who contributed their funds act as a single capital investor and do not become Kraken’s shareholders. According to the pitch, this investment is “highly speculative and illiquid,” and is associated with a “considerable amount of risk.” They will only realise a return in certain cases, for instance, if the exchange floats its shares through an initial public offering.