ClearToken

ClearToken, a London-based company founded in 2021, is developing critical financial market infrastructure to support the institutional adoption of digital assets. The firm operates as a Central Counterparty (CCP) and is expanding its ambition to become a central securities depository (CSD), aiming to bring the stability and risk management principles of traditional finance to the digital asset ecosystem. This model is designed to lower counterparty risk, enhance capital efficiency through netting, and streamline settlement processes across multiple trading venues.

The company was established to address significant barriers for institutional investors in the digital asset market, primarily the necessity to pre-fund transactions and the absence of a centralized clearing and settlement framework. Its leadership team comprises seasoned executives from both traditional finance and digital assets. The team includes CEO Benjamin Santos-Stephens, who previously held roles at Instinet and Nomura's Laser Digital, and CTO Robert Karlsson, who brings deep experience in crypto trading and high-volume systems. They are supported by a team with extensive backgrounds in financial market infrastructure, technology, and regulatory policy from institutions like the Bank of England, LCH, and major banks.

ClearToken provides a horizontal clearing solution that integrates with numerous digital asset trading sources, custodians, and settlement banks. By acting as the buyer to every seller and the seller to every buyer, the CCP removes bilateral counterparty risk and guarantees the settlement of trades. This structure allows market participants like market makers, prime brokers, banks, and asset managers to optimize capital and liquidity instead of pre-funding trades on various exchanges. The firm plans to operate 24/7, offering multiple intraday settlement cycles and eventually providing Delivery vs. Payment (DvP) settlement to ensure legal finality. In September 2023, ClearToken successfully completed a Proof of Concept with over 60 industry participants, validating its model for risk management and settlement. The company has raised over $10 million in funding from prominent institutional investors including Nomura's Laser Digital, Zodia Custody (a subsidiary of Standard Chartered), Flow Traders, GSR, and LMAX Digital. The firm is actively seeking authorization from UK regulators, including the Bank of England and the Financial Conduct Authority, to operate as a Recognised Clearing House.

Keywords: digital asset clearing, central counterparty, CCP, institutional crypto trading, post-trade processing, settlement risk, counterparty risk management, capital efficiency, financial market infrastructure, FMI, digital securities sandbox, tokenized assets, multilateral netting, delivery versus payment, DvP, liquidity optimization, regulated crypto, UK fintech, trade novation, asset settlement