Payward, Inc., the owner of US-based digital currency exchange Kraken, announced on 25th March that it has raised $5m in new capital as part of a Series A fundraising round.
, first launched in September 2013, allows users to buy and sell bitcoin, namecoin, dogecoin and Ripple, among other digital currencies.
The round was led by Hummingbird Ventures, an early-phase venture capital firm that has invested in digital properties like Dubai-based price comparison platform Souqalmal.com and object-based software defined storage service provider Amplidata in recent months.
The funding will be used by Payward to strengthen Kraken's position in the global digital currency market.
Jesse Powell, CEO at Kraken, told CoinDesk that the company plans to deploy its new funding to meet key development and regulatory needs.
The news comes as the US government issued new guidance on digital currencies. The Internal Revenue Service announced on 25th March that it would treat them like property, making them subject to capital gains tax treatment.
Given the increased burden of compliance requirements, Kraken is taking its approach to these matters seriously.
Pressure on exchanges
Earlier this week, Kraken announced that it had passed a verifiable proof of reserves audit. The test was carried out in order to bolster confidence in the exchange's ability to meet customer balance demands.
During the interview, Powell went on to speculate that some exchanges may face greater scrutiny in the months ahead.
In the wake of the collapse of Mt. Gox, exchanges have faced financial difficulties. China-based Vircurex froze withdrawals this week, in just the latest in a string of high-profile bitcoin exchange issues.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.