29 Jun 2021 · 3 min read

Deutsche Börse Group, TP ICAP Make Crypto Bets With New Plans, Investments

Two major players in the traditional finance world just announced their new crypto moves.

Source: Adobe/pvl

First, major UK-based interdealer broker TP ICAP has partnered with US-based mutual fund giant Fidelity Investments and Zodia Custody to launch a crypto trading platform. Meanwhile, stock exchange giant Deutsche Börse Group said it acquired a majority stake in Crypto Finance AG, as the German giant is building a European digital asset ecosystem.

TP ICAP, the London Stock Exchange-listed global firm of professional intermediaries, which operates in the world's financial, energy, and commodities markets, said it has already started to onboard clients to its new platform and will launch to the market in the second half of the year.

The new platform will allow institutional investors to trade bitcoin (BTC) first, while ethereum (ETH) will be added "later" as well.

Besides Fidelity Investments, it will be launched along with Zodia Custody, which is a digital asset custody unit itself launched back in December by banking corporation Standard Chartered's and provider of asset servicing Northern Trust.

Neither Standard Chartered nor Fidelity Investments have invested in the platform, TP ICAP told Reuters.

TP ICAP launched its Digital Assets business in 2019, enabling clients to trade cryptoasset derivatives products.

"This new trading platform for the spot market significantly expands the firm’s footprint in this fast-growing area," they said, adding that the platform will offer to its users post-trade infrastructure with a network of digital asset custodians, as well as separate execution and settlement, "something widely seen as key to greater involvement of larger risk-averse investors in the emerging crypto market."

Amsterdam-based Flow Traders will provide liquidity to the platform, but TP ICAP said they expect to announce additional liquidity providers in the second half of the year.

The platform is now waiting for approval by Britain's financial regulator.

“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," Simon Forster, Co-Head of Digital Assets at TP ICAP, was quoted as saying in the announcement.

Increasing demand

Meanwhile, Deutsche Börse Group said it has acquired a two-thirds majority stake in Switzerland-based Crypto Finance AG, a provider of trading, storage, and investment in digital assets services to institutional and professional clients, for an investment in "a moderate three-digit CHF million range."

The remaining shares stay with existing investors, including CEO and founder Jan Brzezek, who will continue to lead and manage the business. The parties expect to close the transaction in the fourth quarter of 2021, following regulatory approvals.

As reported, in April 2020, Crypto Finance raised around USD 14m in a Series B round led by Swiss investor Rainer-Marc Frey and the Asian-based private equity fund Lingfeng Capital.

"As part of Deutsche Börse Group, Crypto Finance will be able to further scale the business and expand the range of digital asset services. Deutsche Börse also intends to make Crypto Finance’s offering easily accessible for participants via its established platforms," the Group said in an emailed announcement.

According to Thomas Book, Executive Board member for Trading & Clearing at Deutsche Börse, there is increasing demand from established financial institutions who are looking to become active in this new asset class and want a trusted partner.
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(Updated at 10:31 UTC with additional details about TP ICAP's platform.)