TP ICAP plans to launch a wholesale trading platform for cryptocurrencies, in partnership with Fidelity Digital AssetsSM, Zodia Custody, and Flow Traders.
Subject to registration with the UK Financial Conduct Authority, the platform will feature a wholesale electronic marketplace for spot cryptoasset trading, including Bitcoin and Ethereum, as well as providing connectivity and post-trade infrastructure into a network of digital assets custodians.
Fidelity Digital Assets and Zodia Custody, both leading crypto assets custodians, will ensure clients have a segregated and interoperable model for execution and settlement, a key requirement for clients entering this new asset class.
The platform’s trading model allows clients to access liquidity whilst their assets remain under custody at their digital asset custodian of choice, providing a level of security that institutional investors expect.
Launched in 2019, TP ICAP’s Digital Assets operation provides access to cryptoasset derivatives products. The new platform will open the door to the spot market. The DA business is led by Duncan Trenholme and Simon Forster and operates from the firm’s offices in London, New York, and will soon expand into Asia.
Client onboarding has already begun and the firm plans to integrate additional strategic custody partners and expects to expand its network of digital asset custodians as it establishes a new industry model for clearing and settlement.
Simon Forster, Co-Head of Digital Assets at TP ICAP, said: “Client demand to trade spot cryptoassets is significant and growing, with interest coming from our traditional customer base across the different asset classes we operate in. But to date many of our clients have been prevented from accessing cryptoasset markets due to current limitations in market infrastructure, with most execution venues requiring pre-funding and also acting as custodian. This poses challenges from a conflict of interest perspective and results in fragmented liquidity. Our partnership, and resultant new platform, is a natural evolution in market structure that will make digital assets, such as Bitcoin, more accessible for the wholesale market.”
Flow Traders, historically specialised in Exchange Traded Products (ETPs), has been providing liquidity to cryptoasset markets since 2016 and will be one of the initial liquidity providers on this new platform.
Michael Lie, Head of Digital Asset Trading at Flow Traders, said: “We are delighted to be partnering with TP ICAP as a liquidity provider on this new platform. As the #1 market maker in cryptocurrency ETPs, as well as being a leading spot OTC liquidity provider, we have seen first-hand the increase in institutional interest in cryptoassets. We have long been in favour of initiatives such as this that will make the crypto space more accessible for investors.”
Andrew Polydor, Global Head of Markets at TP ICAP, said: “This platform will provide our global client base with the trading infrastructure, connectivity, surveillance, and market standards they require as a minimum across traditional markets whilst also recognising the nuances of this new asset class. It leverages mature trading technology developed by our partners GMEX Technologies, to provide spot liquidity in digital assets as well as access to multiple custodians via a bespoke post-trade solution. These are key requirements for our institutional clients who want to be able to trade, invest and safely access this growing area of the market.”
Chris Tyrer, head of Fidelity Digital Assets in Europe, said: “Collaborating with industry leaders like TP ICAP to bring to market innovative solutions that strengthen the digital assets ecosystem is critical to enabling even more institutional participation. With this new infrastructure, we’re addressing one of the frictions in the investor experience that’s unique to this nascent asset class. Now, investors can more confidently execute trades knowing their assets remain still and secure in our custody.”
Maxime de Guillebon, Chief Executive Office of Zodia Custody said: “Zodia and TP ICAP share the same vision of the future of crypto asset investing. By combining liquidity with institutional-grade custody we will create an ecosystem that complements the expectations of institutional investors in terms of segregation of duties and asset safety. This infrastructure will enable operational efficiency and speed of transaction without compromising on security or reliability.”