XREX, a Taipei-headquartered crypto-fiat exchange and trade technology platform, has closed its pre-A funding round, raising US$17 million from prominent investors.

Led by CDIB Capital Group, Taiwan’s largest financial group, XREX’s latest fundraise attracted high-profile investors and venture capital firms, including Taiwan-based AppWorks — which only recently raised US$150 million — and the National Development Fund, an investment program directly operated by the Taiwan government.

XREX CEO and co-founder Wayne Huang told Forkast.News that the company plans to use the proceeds to strengthen its compliance as it expands to more countries in emerging markets and that it would need to hire compliance officers familiar with new jurisdictions. The company will also use the proceeds to fund the applications of new licenses as well as the expansion of its product and sales teams.

Previously, XREX raised US$7 million in 2019 in its seed round from investors including AppWorks and CDIB. XREX offers crypto-fiat exchange services to help cross-border small and midsize enterprises that struggle with dollar liquidity compete on an even playing field, with its mission of driving financial inclusion via blockchain.

XREX’s successful fundraise — which was oversubscribed — reflects Taiwan’s ambition to take part in the investment and development of the technology. However, Taiwan’s strict banking regulation environment could somewhat be a hurdle, Huang said. “Our banks are highly regulated. It’s harder and slower for our banks to innovate and to expand business outside of Taiwan.” 

“This is in contrast to other Asian countries or cities such as Hong Kong or Singapore, where their banking industry has really thrived by providing their services to foreign users, foreign businesses and foreign markets,” Huang added. “Our entire banking industry has only mostly had domestic business.”

But the blockchain industry could help Taiwan’s banking industry innovate, Huang said. “Taiwan is super friendly towards the blockchain industry.”

In July, Taiwan enacted new anti-money laundering rules to boost reporting requirements for cryptocurrency exchanges operating on the self-governing island. Crypto exchanges now need to fulfill know-your-customer requirements such as authenticating the identity of their clients, according to the new rules.

“It’s a very fair and clear set of regulations — very well done,” Huang said. “Any decent virtual asset service provider could meet such requirements.”

“I am just very thrilled about everything that’s happening in Taiwan, how friendly the government is, as well as the recent progress it has made,” he added.

See related article: Taiwan set to roll out new AML regulations for crypto exchanges