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SA crypto-currency exchange Ovex gets more funding

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South African crypto-currency exchange Ovex has announced a strategic investment from quantitative crypto-currency trading firm Alameda Research, developer of FTX, the fifth-largest crypto derivatives exchange in the world by trading volume.

This as Bitcoin, the world’s most valuable digital currency, has witnessed massive growth in value over the past months.

Ovex did not disclose how much investment it received.

Ovex was founded in 2017 and specialises in over-the-counter (OTC) trading. It spent 14 months perfecting the technology behind the platform, with a matching engine that is capable of processing in excess of one million trades per second.

The company says this makes it one of the fastest exchanges in the world. Having launched in January 2018, the exchange has seen rapid growth, catapulting it into the top three South African exchanges by daily trading volume., it adds.

In March 2019, Ovex also received funding from Invictus Capital to complete two successful funding rounds – the first with Newtown Partners, whose directors include Shark Tank SA’s Vinny Lingham and executive director of The Bitcoin Foundation, Llew Claasen.

Alameda Research was founded in October 2017 and manages over $100 million in digital assets and trades $600 million to $1.5 billion per day across thousands of products – all major coins and altcoins, as well as their derivatives.

In a statement, Ovex says with $270 million in monthly trading volume and a valuation of over one billion South African rand, the crypto exchange is delivering prime brokerage services to institutions and high net-worth individuals across Africa amid rising demand for crypto access.

Jonathan Ovadia, CEO of Ovex.
Jonathan Ovadia, CEO of Ovex.

Over the last few years, it notes, Africa has become a crypto-currency hotspot as its large unbanked population looked for peer-to-peer solutions to provide them access to the retail financial market and empower them to operate their businesses unencumbered by financial instability.

Between July 2019 and June 2020, the total volume of Bitcoin traded to and from Africa rose more than 55%, and the total number of transactions increased by more than 30%, according to Chainanalysis.

Ovex points out that the movement is mostly led by three of the continent’s largest economies – SA, Nigeria and Kenya.

Now that many citizens are jumping on the crypto-currency train for their own needs, the asset has garnered interest from larger institutions, says the crypto exchange.

“Operating out of one of the continent’s leading crypto-currency markets in South Africa, Ovex understands the value of digital assets in its economic climate and the novel financial opportunities the platform can offer to both retail and institutional investors,” says Jonathan Ovadia, CEO of Ovex.

“With support and funding from FTX, we are committed to improving market efficiency in South Africa and the wider continent, empowering people here to get the access they deserve in a decentralised ecosystem.”

“I’m excited about our strategic investment in Ovex, Africa’s leading OTC desk. Crypto may have a big impact on the future of Africa, and I’m looking forward to seeing where it goes,” says Samuel Bankman-Fried, CEO of FTX and Alameda Research.

The investment in Ovex comes as Bitcoin’s price has once again soared in recent months – as has the price of some of its other crypto-currency peers, such as Ethereum – making this modern form of investing a hot topic at the moment.

“The seemingly ever-increasing price of Bitcoin leaves the world holding its breath once again – as we did at the end of 2017 – waiting in anticipation for the apparent bubble to burst,” says Wiehann Olivier, partner and digital assets lead at Mazars in South Africa.

Olivier points out that the volatility of Bitcoin and other crypto-currency prices continued to contradict weekly analysis and projections from the start of December last year.

“Bitcoin has broken through several thresholds and psychological barriers, reaching a new record high of over $41 000. What was interesting is that Bitcoin, and other crypto-currencies, were not nearly as topical as they were when it set its previous record high of $19 500 at the end of 2017.”

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