Hidden Road Partners, a Citadel Securities-backed prime brokerage firm, is in the process of raising $120 million in its Series B funding round with the goal of reaching a market valuation of $1 billion. The firm, founded in 2018 by former SAC Capital and Point72 Asset Management employee Marc Asch, aims to expand its offerings in the cryptocurrency and foreign exchange markets. The Series A funding round secured $50 million, with notable investors including Citadel Securities, FTX Ventures, and Coinbase Ventures.
In March 2024, Hidden Road Partners, along with other prime brokers like FalconX, was instructed by Binance to enhance their Know Your Customer (KYC) processes as part of the exchange’s efforts to comply with U.S. regulations. Binance required prime brokers to collect and verify detailed KYC information, including the geographic locations of their clients’ offices, founders, and staff, to ensure compliance with U.S. law. By reinforcing KYC protocols, Binance sought to clarify the obligations of its partnering institutions and ensure alignment with its compliance framework to maintain access to its liquidity offerings.
Hidden Road’s Series B funding round is expected to raise approximately $120 million, according to sources familiar with the matter. The firm declined to comment on the funding round. Established in 2018, Hidden Road offers prime-brokerage services across various markets, including foreign exchange, precious metals, and digital assets. The company’s rapid growth and expansion plans highlight the increasing demand for brokerage services in the cryptocurrency and foreign exchange markets.
The Series A funding round for Hidden Road was led by Castle Island Ventures and attracted significant interest from investors such as Citadel Securities, FTX Ventures, and Greycroft. The firm’s successful fundraising efforts and strategic partnerships with key players in the financial industry have positioned it as a major player in the prime brokerage space. With the current funding round aimed at further expanding its offerings, Hidden Road is poised to capitalize on the growing opportunities in the cryptocurrency and foreign exchange markets.
Binance’s directive to prime brokers like Hidden Road Partners to enhance their KYC processes underscores the importance of regulatory compliance in the cryptocurrency industry. By implementing stringent KYC protocols, Binance aims to ensure that its partnering institutions adhere to regulatory requirements and maintain access to its liquidity offerings. The exchange’s commitment to transparency and regulatory compliance reflects the evolving regulatory landscape in the cryptocurrency market and the need for industry participants to comply with regulatory standards.
The broader strategy of Binance to comply with U.S. regulations and reinforce KYC processes for its partnering institutions reflects the exchange’s commitment to regulatory compliance and transparency. By requiring prime brokers like Hidden Road Partners to enhance their KYC procedures, Binance aims to minimize regulatory risks and ensure that its services are accessible to a wider range of users. As regulatory requirements continue to evolve in the cryptocurrency industry, partnerships between exchanges and prime brokers will play a crucial role in ensuring compliance with regulatory standards and fostering a trustworthy and transparent market environment.
