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U.S.-based cryptocurrency exchange Bittrex is teaming up with Rialto, an Alternative Trading System (ATS), to offer a new digital securities trading platform.
The partnership with Bittrex will allow the next-generation trading platform to expand its product offerings, which are currently limited to three fixed income products.
The two platforms are in talks with regulators to gain approval before launching the expanded platform, but there was no indication in the press release as to when conversations with regulatory authorities will be wrapped up. If approved, the platform will be able to list digital currencies that are found to be registered securities with the U.S. Securities and Exchange Commission (SEC).
Use of the platform will be limited to institutional investors, corporations, U.S. registered broker-dealers, and accredited investors who meet the SEC’s income and net-worth requirements.
Rialto Trading’s CEO, Shari Noonan, spoke about the partnership, saying:
“We are excited to share Rialto’s expertise in building networks and trading solutions in the regulated securities industry to develop this new venture in partnership with Bittrex. 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.”
Bittrex CEO, Bill Shihara, shared his thoughts about the Rialto partnership, adding:
“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, and we found the ideal partner in Rialto and its CEO Shari Noonan. We’re merging Bittrex’s technology, cybersecurity and blockchain expertise with Rialto’s deep knowledge of the securities industry. And, when you add that foundation with Rialto’s extensive background in financial services, including Shari’s experience at Goldman Sachs and Deutsche Bank, this new venture is well-positioned to further advance blockchain’s adoption by offering a comprehensive solution at the right time.”
Bittrex Rialto Partnership Comes Amidst SEC Regulatory Clampdown
The newly announced partnership comes as the SEC is taking a much closer look at the cryptocurrency markets.
Following the 2017 bull run that drew many new investors into the industry, U.S. regulators became increasingly interested in the space, and have since been taking action to reduce fraud and scams. This includes targeting initial coin offerings (ICOs) and other fundraising schemes.
One concern within the cryptocurrency market is that certain virtual currencies will be deemed as securities by the SEC, which will subject them to a new level of regulatory scrutiny. If a cryptocurrency, like XRP, for instance, is deemed as being a security, it would immediately be delisted from any, and all, exchanges operating in the U.S., crushing its value and drying up its liquidity.
As a result of this, many exchanges are working to acquire or partner with securities broker-dealers or companies with proper regulatory authorizations that could list these cryptocurrencies. U.S.-based exchange Coinbase recently acquired broker-dealer Keystone Capital Corp. in a similar move to prepare for future regulations.
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