Montreal-based digital asset custodian Knøx has secured $6.2 million (8.25 million CAD) in a seed round to support its crypto custody service for institutional customers and fiduciaries.

The funding round was led by San Francisco-based venture capital firm Initialized Capital, with the participation of financial services giant Fidelity and venture firm iNovia, Canadian technology-focused news outlet BetaKit reported on Sept. 24.

Protection of customers against losses

Knøx’s products are geared to asset management firms, liquidity providers and exchanges, specifically addressing the issue of customers’ protection against losses.

Garry Tan, a managing partner at Initialized Capital, stated that “there is a growing appetite for more comprehensive insurance policies covering digital asset custody.” Alex Daskalov, co-founder and CEO of Knøx, said:

“Entities who have their digital assets managed by a third party deserve the right to insurance. Too often, insurance policies are purchased for marketing purposes instead of transferring the risks that matter. Our insurance program is designed to help fiduciaries meet their obligations.”

Backing of other blockchain startups

In July, Initialized Capital led a $3.75 million seed round for blockchain-powered video game studio Horizon Blockchain Games. Other participants in that funding round included iNovia and other major blockchain investors such as Polychain Capital and Digital Currency Group.

This spring, Initialized Capital alongside Pantera Capital, Foundation Capital and Y Combinator, backed the United States-based startup Sparkswap, which aimed to create a decentralized exchange based on the Bitcoin (BTC) Lightning Network.