Bittrex, a leading American cryptocurrency exchange, has announced a collaboration with Rialto Trading, a registered alternative trading system (ATS) business that presently provides fixed-income products to traders. Once authorized by authorities, the joint venture intends to provide a new, innovative digital securities trading platform as well as blockchain-based digital securities.
Rialto specializes on running a regulated broker-dealer ATS, while Bittrex specializes in blockchain technology, digital currency trading, wallets, and cybersecurity. Using the complementary experience that the two businesses offer to the joint venture, they will collaborate to provide a broad variety of services to the whole digital asset securities ecosystem, including advisory services, placement, trading, and custody. Rialto’s new ATS is also scheduled to offer digital securities trading in US dollars (USD). According to Reuters, the joint venture will also provide Rialto’s clients with access to a larger market and will continue to be available to institutional investors, corporations, America-registered broker-dealers, and qualified investors who meet the rules for annual income of at least $200,000 or a net worth of more than $1 million.
Though the participating corporations claim to have had lengthy conversations with the authorities, no estimated date for obtaining the requisite clearance has been stated.
Tightening Regulations, Intensifying Competition
Bittrex’s strategic move is perceived as a response to rival Coinbase’s recent effort to register as a licensed broker-dealer. Coinbase filed for registration with the Securities and Exchange Commission (SEC) in June and is now pursuing a broker-dealer license, an alternative trading system license, and a registered investment adviser license. If it is successful, it will be able to sell blockchain-based securities. (See also: Why Did Coinbase Purchase a Broker-Dealer?)
The action is also important since the SEC has begun applying the appropriate requirements for exchange operations and initial coin offerings (ICO).New tokens, which are often created via an ICO, must conform to securities legislation, which entail that they must be traded on authorized exchanges.
“We’re combining Bittrex’s technology, cybersecurity, and blockchain experience with Rialto’s extensive understanding of the securities business,” stated Bill Shihara, CEO of Bittrex.
“By working together,” said Shari Noonan, CEO of Rialto Trading, “we’ll be able to extend our present client services to include not just digital securities, but also access to an internationally sophisticated and dependable trading platform.”
Investing in cryptocurrencies and Initial Coin Offerings (“ICOs”) is very dangerous and speculative, and neither Investopedia nor the author suggest that you do so. Because every person’s circumstance is different, a knowledgeable specialist should always be contacted before making any financial choices. Investopedia makes no guarantees or warranties about the accuracy or timeliness of the information provided on this site. The author owns no cryptocurrencies as of the day this post was published.
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