Brett Harrison, the former president of FTX US who departed months before the exchange’s collapse, has raised $35 million in Series A funding for Architect Financial Technologies, a startup building a perpetual futures exchange designed to capture institutional trading volume from the $85.7 trillion global derivatives market, positioning the venture as a direct challenge to Chicago Mercantile Exchange Group’s decades-long dominance.

The funding round, which values Architect Financial at $187 million post-money, drew investment from Miami International Holdings, the operator of multiple US securities and derivatives exchanges, alongside Tioga Capital, ARK Invest, Galaxy Ventures and Coinbase Ventures, signaling institutional confidence that perpetual futures contracts on traditional assets represent the next evolution of derivatives infrastructure.

Wall Street Mechanics Meet Crypto Innovation

Harrison’s venture, operating through its AX exchange platform under Bermuda Monetary Authority regulation, enables hedge funds, asset managers, and proprietary trading firms to trade perpetual futures on stocks, foreign exchange, interest rates, and commodities without geographic restrictions, except for US domestic traders.

The platform launched this month after three years of development and approximately $52 million in cumulative capital deployment across pre-seed, seed and Series A rounds.

Unlike traditional futures contracts that expire monthly or quarterly, perpetual futures contracts have no settlement dates. Moreover, traders can access positions 24 hours a day without the operational friction of “rolling” maturing contracts into subsequent months, a structural advantage that reduces transaction costs and execution risk for institutional portfolios managing billions in notional exposure.

“Our team is excited to initiate AX’s next critical phase of growth with the support of this strong group of strategic partners,” Harrison said in a statement announcing the funding. “We are advancing toward the shared goal of catalyzing a new era in global derivatives trading.”

The Institutional Pivot Reshaping Derivatives Markets

The timing capitalizes on documented shifts in institutional trading behavior. Cryptocurrency derivatives trading volume reached $85.7 trillion in 2025, with a daily average turnover of $264.5 billion, according to CoinGlass’s annual derivatives report. Critically, institutional investors now account for 42 percent of total derivatives trading volume, up from predominantly retail speculation three years ago.

Furthermore, global foreign exchange trading volumes grew nearly 30 percent since 2022, reaching $9.6 trillion per day in April 2025, according to the Bank for International Settlements’ triennial survey. This expansion creates an addressable market opportunity for perpetual futures platforms offering capital-efficient alternatives to traditional spot and forward currency contracts.

Brett Harrison’s background uniquely positions him to execute this institutional strategy. After earning a PhD in theoretical physics from Harvard University, he built low-latency trading systems at Citadel Securities. He worked as a quantitative trader at Jane Street Capital before joining FTX US in May 2021.

Later, he resigned in September 2022, publicly criticizing the exchange’s organizational dysfunction months before FTX’s $8 billion bankruptcy filing shocked global markets.

Regulatory Arbitrage Through Bermuda Licensing

Architect Financial chose Bermuda registration strategically. The jurisdiction enacted the Digital Asset Business Act in 2018, establishing comprehensive regulatory frameworks that competing offshore venues lack.

Unlike the Cayman Islands or the British Virgin Islands, Bermuda requires licensed exchanges to maintain enterprise risk management systems, cybersecurity controls, and custody protocols that meet international standards and credibility factors that institutional clients demand.

Meanwhile, US regulators have not approved domestic perpetual futures exchanges offering traditional asset contracts. The Commodity Futures Trading Commission continues studying regulatory frameworks for perpetual contracts beyond cryptocurrencies, creating multi-year approval timelines that offshore competitors bypass entirely.

“Bermuda’s tiered licensing regime provides a flexible and scalable regulatory framework that supports both institutional-grade businesses and early-stage innovators,” according to legal analysis from Carey Olsen, a leading offshore law firm.

The jurisdiction has licensed over 50 digital asset businesses, including Coinbase, Kraken and Circle, demonstrating regulatory sophistication that attracts institutional capital.

CME’s Dominance Faces Structural Challenge

Chicago Mercantile Exchange Group generated $1.6 billion in quarterly revenue during Q2 2025, clearing $1.4 billion in transaction fees alone. The exchange processes average daily volume exceeding 30 million contracts, maintaining market leadership across equity indices, interest rates, energy and agricultural derivatives.

However, CME’s architecture prevents offering true perpetual futures. The exchange operates fixed daily clearing cycles and settlement windows incompatible with perpetual contracts’ continuous funding rate mechanisms.

Consequently, CME launched “spot-quoted futures” on the S&P 500 and Nasdaq indices, hybrid products that mimic perpetual characteristics while maintaining traditional clearing infrastructure.

This compromise sacrifices the capital efficiency perpetual futures deliver. Institutional traders accessing 25x leverage on Architect Financial’s platform require only 4 percent margin per dollar of notional exposure. Traditional futures demand significantly higher capital commitments or complex options overlays, creating cost structures that incentivize migration toward perpetual venues over multi-year timeframes.

Market Makers Drive Liquidity Strategy

Architect Financial’s critical challenge is to bootstrap sufficient trading liquidity to attract institutional order flow. Established exchanges like CME benefit from network effects, as institutions trade where other institutions already trade, creating self-reinforcing depth and tight bid-ask spreads.

Miami International Holdings’ strategic investment directly addresses this obstacle. The exchange operator’s portfolio includes MIAX Pearl Equities, MIAX Emerald and the Bermuda Stock Exchange, providing distribution channels and market-making relationships that Architect Financial can leverage immediately.

Additionally, Coinbase Ventures’ participation signals coordinated ecosystem development. The largest US cryptocurrency exchange identified real-world asset perpetual futures as a top institutional investment priority for 2026, according to public disclosures from a venture fund.

Capital Efficiency Reshapes Institutional Allocations

The perpetual futures model fundamentally alters the economics of institutional capital deployment. A hedge fund managing a $500 million equity portfolio can establish $5 billion in short perpetual futures positions using 10x leverage, requiring only $500 million margin.

Achieving equivalent hedging with traditional vehicles requires either full notional capital or options strategies subject to time decay and fluctuations in implied volatility.

This efficiency compounds across large institutional portfolios. Asset managers overseeing $100 billion in traditional futures exposure could potentially reduce margin requirements by $5-10 billion through perpetual migration, freeing capital for alternative alpha-generating strategies.

“That simplicity is appealing to retail clients, while institutions value perpetual futures for their capital efficiency, operational simplicity and arbitrage opportunities,” said Josh Barraclough, founder of One Trading. This European exchange launched institutional perpetual futures this week under MiFID II regulation.

Tokenization Convergence Accelerates Adoption

Architect Financial’s launch coincides with rapid growth in tokenized real-world assets. The total tokenized asset value reached $33 billion by October 2025, up 400 percent over 2 years, according to XBTO’s market analysis. BlackRock’s USD Institutional Digital Liquidity Fund alone exceeded $500 million in assets under management within months of launching.

Tokenized equities, treasuries and commodities provide the spot price benchmarks against which perpetual futures contracts are marked. This infrastructure convergence enables institutional traders to hold tokenized stock positions while simultaneously hedging via perpetual futures, both settled on blockchain rails, eliminating the custodial friction traditional cross-market hedging requires.

Furthermore, tokenized derivatives of traditional assets reached $3.1 billion in market value in 2025, driven by innovations in decentralized finance platforms, according to cryptocurrency market statistics. This parallel development validates institutional demand for blockchain-based derivatives infrastructure beyond speculative cryptocurrency trading.

Competitive Threats and Execution Risks

Architect Financial enters a market where incumbent advantages remain formidable. CME’s clearing and settlement infrastructure connects to every principal institutional broker and custody bank globally. Migration costs, rewriting algorithmic trading systems, establishing new prime brokerage relationships, and navigating unfamiliar regulatory regimes create switching friction that protects CME’s market position despite structural disadvantages.

Moreover, leverage amplifies systemic risk. Perpetual futures enabling 25x leverage can trigger liquidation cascades during extreme volatility. If prominent positions face forced liquidation into thin order books, price dislocations spread across correlated markets.

Architect Financial must implement sophisticated risk controls, including auto-deleveraging mechanisms, insurance funds to cover counterparty defaults, and real-time position monitoring, which require significant ongoing capital investment.

Bermuda’s regulatory framework, while progressive, carries enforcement uncertainty. Major market disruptions or fraud allegations could prompt US or European regulators to pressure Bermuda to adopt restrictive policy changes, introducing operational risks that Architect Financial cannot fully control.

Follow USTechTimes on Facebook, Twitter and Linkedin for in-depth news of market trends, funding updates, and regulatory changes affecting startups in USA.

We Recommend: