Fatfish Internet Group (ASX: FFG) announced it will invest US$1 million of seed capital in renowned Australian entrepreneur Tony Mackay’s online virtual currency exchange start-up: Kryptos-X.
Initially, Kryptos-X will be offering its services in Singapore to citizens and residents. From there, Kryptos-X will be expanded into other countries where online cryptocurrency trading is permitted.
Kryptos-X has been established as an electronic marketplace for bitcoin trading that is high-volume and high-frequency.
Mr Mackay pegged Singapore as the start-up place because it has a well-regulated environment and two existing crypto exchanges: Coinhako and FYB-SG.
Under Fatfish Internet’s investment, it will be issued shares in the holding company, which will own and operate Kryptos-X. This will bring Fatfish’s stake in the holding company to about 27%. Additionally, once it has received the shares, Fatfish will appoint two directors to Kryptos-X’s board.
Mr Mackay has also been invited to join Fatfish Internet’s board.
According to Fatfish Internet this investment will give the company exposure to the annual US$1.46 trillion cryptocurrency trading volume.
Fatfish Internet will fund its Kryptos-X investment with existing cash reserves, as well as a potential capital raising and revenue for a proposed listing of its venture builder’s asset portfolio.
Kryptos-X will only work with blockchain technology-based digital tokens that don’t carry security or collective investment scheme features. According to Fatfish Internet, this abides by Singapore’s Securities and Futures Act.
Additionally, Fatfish Internet has sought legal advice about its regulatory requirements for the start-up in both Singapore and Australia.
Prior to Kryptos-X’s launch, the design and software requirements need to be finalised, as well as sourcing third-party providers to supply or build the software infrastructure, integrate relevant features to ensure compliance, partner with financial institutions, find personnel to manage the electronic market place, and appoint service providers that can provide clearing house services for virtual currencies.
Fatfish Internet anticipates these steps will take about three months, and Kryptos-X will be ready for launch shortly after.
Mr Mackay founded Chi-X Europe and Global, which are alternative stock trading platforms and known for disrupting traditional platforms in Europe, Australia, Canada and Japan.
As part of the Kryptos-X start-up, Mr Mackay will run the project’s development with the assistance of four initial employees.
Fatfish Internet’s stock sky-rocketed after the announcement was released mid-afternoon, with company’s share price up almost 60% at A$0.076 towards the end of late afternoon trade.