Crypto infrastructure startup Zerohash has raised $104 million in a Series D funding round backed by major financial institutions including Morgan Stanley and SoFi. The round values the company at $1 billion and signals growing Wall Street acceptance of digital asset technology under the Trump administration's more favorable regulatory approach.
What to Know:
- Interactive Brokers led the $104 million Series D round, with participation from Morgan Stanley, SoFi, and Apollo-managed funds
- The funding values Zerohash at $1 billion as the startup provides crypto trading, stablecoin, and tokenization services to financial firms
- The investment comes amid a regulatory shift under President Trump that has encouraged traditional financial institutions to embrace cryptocurrency products
Financial Giants Embrace Crypto Infrastructure
Interactive Brokers, the automated trading firm, led the investment round alongside strategic investors who also serve as Zerohash clients, according to founder and CEO Edward Woodford. Apollo-managed funds participated in the round as well. The funding reflects a broader transformation in how established financial institutions view cryptocurrency technology.
"We wanted to raise from the largest, most trusted brands in the world and have that be the bridge into this new technology," Woodford said in an interview.
The strategic nature of these investments distinguishes them from typical venture capital backing.
Founded in 2017, Zerohash operates as a behind-the-scenes provider for banks and fintech companies seeking to offer blockchain-based services. The company focuses on three primary areas: cryptocurrency trading infrastructure, stablecoin technology, and tokenization services for traditional assets.
Regulatory Shift Fuels Investment Wave
The funding comes during a period of dramatically improved regulatory conditions for cryptocurrency companies. After President Trump took office, federal agencies shifted from the skeptical stance maintained under former Securities and Exchange Commission Chairman Gary Gensler to actively supporting digital asset innovation.
This regulatory transformation has prompted executives at major financial firms to publicly express confidence about entering the cryptocurrency space. Bank of America and Morgan Stanley leadership have signaled their institutions' readiness to expand digital asset offerings.
SoFi CEO Anthony Noto told CNBC in April that his company was prepared to reintroduce cryptocurrency trading following the regulatory changes. The shift has created opportunities for infrastructure providers like Zerohash to partner with established financial institutions.
"Part of this raise is obviously accelerating [adoption] across all three of those verticals with a range of customers who are also investors," Woodford explained.
The dual investor-client relationship creates aligned incentives for product development and market expansion.
Interactive Brokers currently uses Zerohash's platform for cryptocurrency trading and custody services. The two companies plan to launch a stablecoin product together, expanding their existing partnership.
While Woodford declined to confirm whether Morgan Stanley and SoFi serve as clients beyond their investor roles, he suggested upcoming announcements would clarify these relationships. Representatives from both Morgan Stanley and SoFi declined to provide comment on potential service agreements.
"These groups aren't VCs," Woodford noted. "You can assume that there's obviously a couple of announcements coming down the road with these other investors." The comment suggests pending product launches or expanded service agreements with the investing financial firms.
Understanding Key Crypto Infrastructure Terms
Cryptocurrency trading infrastructure encompasses the technical systems that enable buying, selling, and storing digital assets securely. Stablecoins represent digital currencies pegged to traditional assets like the U.S. dollar, providing price stability for transactions and savings. Tokenization involves converting real-world assets such as real estate or commodities into digital tokens that can be traded on blockchain networks.
These technologies require specialized expertise and regulatory compliance that many traditional financial firms lack internally. Companies like Zerohash bridge this gap by providing turnkey solutions that meet banking industry standards.
Morgan Stanley confirmed its crypto ambitions later Tuesday through an internal memo obtained by CNBC. The investment bank indicated it was preparing to offer cryptocurrency trading through its E-Trade division using Zerohash's infrastructure platform.
Closing Thoughts
The $104 million investment in Zerohash represents Wall Street's growing confidence in cryptocurrency infrastructure as regulatory barriers diminish under the Trump administration. Strategic investments from clients-turned-investors suggest accelerating adoption of digital asset services across traditional financial institutions, with product announcements likely forthcoming from major participants in the funding round.