Exclusive: Telegram backer, Kenetic Capital pour $20m into HK crypto firm

First Digital, the digital asset custody arm of Hong Kong-based financial services company Legacy Trust, has raised US$20 million in funding from investors including Nogle and Kenetic Capital.

While Taipei-based VC firm Nogle has backed encrypted messaging service Telegram, Kenetic Capital has invested in Hong Kong-based startup Neptune Digital, which is building one of the open blockchains of China’s Blockchain-based Service Network.

First Digital Trust CEO Vincent Chok / Photo credit: First Digital Trust

The company will use part of the fresh funds to expand into Singapore, the UK, and Canada, as well as to develop a secondary market for private equity and digital assets. With this move, clients of First Digital can list their assets on the secondary market and receive offers from other clients on the platform.

Funds will also go toward developing the firm’s infrastructure, which provides digital asset security and investment protection, as well as toward hiring across tech, marketing, and business development.

Established in 2019, First Digital offers solutions for the delivery of digital asset custody. Legacy Trust spun out the business to help the financial services company focus more on its traditional trust and pensions businesses while giving its digital asset segment the flexibility to innovate.

“Our mission is to help companies, hedge funds, and institutions integrate Web3 assets seamlessly, securely, and compliantly by providing vital upgrades to open finance infrastructure keeping security, KYC (know your customer) and AML (anti-money laundering), and regulatory requirements at front of mind,” said First Digital Trust CEO Vincent Chok.

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The latest investment comes as major banks and institutions look to integrate blockchain tech within traditional financial infrastructure. Recently, JPMorgan started using digital tokens for short-term trading in fixed-income markets, allowing banks to lend out US government bonds as collateral.

In 2021, First Digital raised US$2.5 million to develop a digital asset payment rail, which helps companies accept card payments via digital assets through an API-integratable widget.

The company also raised US$3 million in 2020 to develop an instant settlement network layer that lets custodian clients transfer digital assets.