Citadel, Virtu, Fidelity, and Schwab team up on crypto marketplace
Ken Griffin’s Citadel Securities and US electronic market maker Virtu Financial are reportedly joining forces with other Wall Street brokers to launch a cryptocurrency trading ecosystem.
Sources familiar with the matter told Coindesk that the alliance would allow retail brokerages to provide crypto-executions to their consumers. However, the initiative is still in its early development phase and the partners are watching regulatory reactions, the source added.
In addition to Citadel and Virtu, the anonymous source confirmed that there is a consortium of other firms involved into the cryptocurrency marketplace. The list includes, among others, venture capital firms Sequoia Capital and Paradigm, as well as a few retail brokerages.
Before the official launch of the crypto trading marketplace, Citadel Securities expects more wealth managers and other industry leaders to join the crypto-focused alliance.
“This marketplace is intended to create more efficient access to deep pools of liquidity for digital assets. So a group of industry leaders are working closely together to facilitate the safe, clean, compliant and secure trading of digital assets.”
A separate report from Bloomberg revealed that Fidelity Investments and Charles Schwab are among the participants developing the combined crypto offering.
The idea is to allow institutional clients to spot trade in crypto assets through a wholesale electronic over the counter (OTC) marketplace. The platform will also include post-trade infrastructure that provides straight through processing (STP) and payment netting services for executed trades into a network of digital asset custodians.
Virtu Financial has been looking to expand its crypto footprint, eyeing a role as a wholesaler for large institutions and brokers. The multibillion-dollar market-making firm has staked out an ambitious roadmap for its involvement in the crypto market. Virtu has been also advocating for crypto firms during meetings with regulators.
The firm has been market-making on top crypto exchanges, including Coinbase and Gemini, for some time and also made markets for financial products tied to crypto.
Virtu makes markets more than 25,000 financial instruments, at over 235 venues, in 36 countries worldwide, continuously quoting buy and sell prices for others to trade against, profiting off the bid-offer spread, using high-frequency trading (HFT) strategies.