UK-regulated crypto exchange Archax acquires U.S. broker-dealer Globacap to enter the booming institutional market

Archax, a U.K.-regulated crypto exchange and custodian focusing on tokenized assets, has acquired a U.S. broker-dealer in an effort to enter the booming institutional market

Archax, the U.K. subsidiary of a European crypto exchange and custodian focusing on tokenized assets, has acquired a U.S. broker-dealer in a bid to enter the booming institutional market in the country after recent positive changes on the regulatory environment.

The move follows the recent purchase of a Spanish brokerage firm to expand services to the European Union, pending regulatory approvals.

According to a report by Blockavizer, the broker-dealer and alternative trading system (ATS) is being sold to Archax and will be renamed Archax Markets US. The firm is regulated by FINRA and the Securities and Exchanges Commission (SEC).

The new entity will serve as the company's foothold on American soil and serve the institutions and professional investors in the country, two Archax executives told Blockavizer.

Asset tokenization is a fast-growing sector in crypto as global banks, asset managers and digital asset firms are increasingly using blockchain rails to move traditional financial instruments. They do so to achieve operational efficiencies and speedier,around-the-clock settlements.

Just in the past weeks, asset manager Fidelity Investments filed to launch a tokenized money market fund and is reportedly working on issuing a stablecoin.

Derivatives exchange CME Group started tokenization tests with Google Cloud with plans to launch new services next year, while the New York Stock Exchange's parent company partnered with Circle to explore services built on USDC stablecoin and tokenized fund USYC.

Archax specializes in the issuance, custody, and trading of tokenized real-world assets (RWAs), including money market funds, corporate bonds, carbon credits and uranium. For example, Archax's recently-issued tokenized Treasury fund on XRP Ledger with asset manager Abrdn saw $45 million in deposits to become a top 10 product by assets under management, rwa.xyz data shows.

Archax has been exploring entering the U.S. market over the past years, but stayed on the sideline due to regulatory uncertainty, Graham Rodford, CEO of Archax, said in an interview with Blockavizer.

"Under this new administration, which seems to be more crypto positive, we are getting more interest from the U.S. as well, which obviously we can't easily serve from the UK, so it makes sense for us strategically to go there," Rodford said.

Archax also plans to expand its offerings to tokenized U.S. equities and bonds, building on its existing partnerships across several blockchains including Ethereum, Polygon, Solana, Hedera Hashgraph and XRP Ledger.