A year ago, launching a U.S.-based crypto exchange focused on perpetual futures would’ve been a non-starter. But a lot has changed… and fast. With a new administration in Washington and shifting regulatory winds, a startup called Rails has decided the time is finally right.
And they’re not playing small.
The Miami company just raised $14 million through a token sale to go live this week with a new crypto exchange designed to combine the speed of traditional platforms with the self-custody of decentralized finance. They’re also backed by major industry names including Kraken, CMCC Global, Quantstamp, Round13 Capital, and Slow Ventures.
For CEO and co-founder Satraj Bambra, the goal is clear: build a better version of FTX, without the blowups.
“You want to be able to play both sides of the market,” Bambra told Fortune, explaining why Rails is launching with a focus on perpetual futures (or “perps”): a popular but long-restricted product in the U.S. that lets traders speculate on asset prices without owning the underlying crypto.
Until now, only overseas platforms could offer this type of trading freely, and only recently have U.S. regulators begun to soften their stance. The Commodity Futures Trading Commission (CFTC) signaled as much in May, hinting that regulatory approval for perps could be coming “very soon.” That gave Rails the green light to go domestic.
Rails is trying to solve one of crypto’s most fundamental trade-offs: fast execution vs. secure custody. Most high-performance exchanges (like Coinbase) control users’ funds to allow for rapid trades. That’s part of what made FTX attractive. Well, at least until customer assets disappeared.
Rails flips that model by letting users retain on-chain custody of their crypto, while still offering near-instantaneous trade execution. That’s possible thanks to a hybrid setup whereby assets are held on-chain, but trades are executed via a centralized matching engine that lives on Kraken’s Layer 2 network, Ink.
“Our hybrid model delivers the best of both worlds,” Bambra said. “Users get the transparency of on-chain custody without giving up speed.”
Bambra, who previously ran a $100 million crypto trading fund for Canada-based Round13, has personally felt the sting of failed exchanges. He admitted that the fund had a “significant” amount stuck in FTX, though it was later recovered through bankruptcy proceedings. This time, the architecture is built to prevent that kind of risk.
Under the hood, Rails is a family affair. Bambra co-founded the company with his wife, Megha Bambra, who serves as CTO. They’re joined by Rick Marini, former COO of Grindr, and Brent Vegliacich, a legal advisor with deep fintech experience.
For now, Rails is live in the U.S. and select global markets. It’s the first major exchange offering perps to both retail and institutional U.S. traders, a bet that American appetite for sophisticated crypto tools is ready to be met.
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