U.S.-based cryptocurrency exchange Bittrex is partnering with a regulated alternative trading system (ATS) with the aim of ultimately launching trading in crypto securities. In an announcement Thursday, Bitrex said it is working with Rialto Trading, which currently offers fixed-income products for traders, to gain regulatory approval to support “blockchain-based securities,” according to a press release.
If approval is granted, Rialto plans to launch a “comprehensive” securities offering, including an issuance advisory service, placement, trading and custody. For the system, the firm will leverage its ATS and the tools it uses to support its existing offerings alongside Bittrex’s blockchain, cybersecurity and cryptocurrency trading tools. The release adds that the ATS will support U.S. dollar trading for digital securities.
Bittrex CEO Bill Shihara said, “It takes a unique combination of advanced technology and financial expertise to build and launch an efficient, reliable and secure platform for trading digital securities.” The partnership will also bring access to a larger market for Rialto’s clients, said CEO Shari Noonan. She added:
“By working together, we’ll be able to expand our current client offerings to not only include digital securities, but also provide them access to a globally advanced and reliable trading platform.”
Shihara continued to say that the “new venture is well-positioned to further advance blockchain’s adoption by offering a comprehensive solution at the right time.”
The move by Bittrex sees the firm positioning itself similarly to U.S. crypto exchange Coinbase, which announced in June that it was taking steps to become a federally regulated broker-dealer.
Coinbase revealed in a company blog post that the firm is in the process of acquiring a broker-dealer license, an alternative trading system license and a registered investment advisor license.
If those licenses are granted, the exchange plans to seek approval from the Securities and Exchange Commission and the Financial Industry Regulatory Authority to offer blockchain-based securities. As part of the plan, Coinbase is moving to acquire several regulated companies – Keystone Capital Corp., Venovate Marketplace and Digital Wealth LLC – to smooth its path.