TP Icap Unveils Spot Crypto Platform

TP Icap is reinforcing its entry into the digital assets space with the launch of a wholesale trading platform for crypto assets, working in collaboration with Fidelity Digital Assets, Zodia Custody and Flow Traders. In 2019, the inter-dealer broker firm established a digital assets business for derivatives.

The new platform, which is subject to registration with the UK Financial Conduct Authority, 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. 

The firm says it is working with its partners to ensure clients have a segregated and interoperable model for execution and settlement, a key requirement for clients entering a new asset class. The firms have collaborated to develop a new trading model where clients will be able to access liquidity at TP Icap whilst their assets remain under custody at their digital asset custodian of choice. Fidelity Digital Assets and Zodia Custody will provide custodian services to the new platform.

The TP Icap digital assets 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. The trading platform, which will be launched in London, will be made available globally to customers across the TP Icap Group as well as to new clients of the firm seeking market access to this new asset class.

“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,” says Forster. “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.”

Michael Lie, head of digital asset trading at Flow Traders, which will become one of the initial liquidity providers on the platform, adds, “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.”

The platform has already started to onboard clients and will launch to the market in the second half of the year, by which time TP Icap says it expects to announce additional liquidity providers. It adds it is also working closely with a number of 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.

“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,” says Andrew Polydor, global head of markets at TP Icap. “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, adds, “[Bringing] 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.”

Zodia Custody is a venture incubated by SC Ventures, the innovation arm of Standard Chartered. Maxime de Guillebon, chief executive officer of the firm says, “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.”