Crypto Trader Wintermute Steps Onto Regulated Wall Street With Broker License — WSJ

By Vicky Ge HuangWintermute's U.S. arm has registered as a broker-dealer, ushering the crypto-trading firm into regulated Wall Street and clearing a path for its expansion into traditional financial services.The detailsThe registration makes Wintermute USA eligible to become designated market makers on securities exchanges, including the New York Stock Exchange and Nasdaq. Market makers serve as key intermediaries in financial markets by continuously buying and selling stocks and other securities to ensure other investors can trade instantly without waiting for a matching order.Becoming a broker-dealer also requires the firm to become registered with the Financial Industry Regulatory Authority and brings it under the jurisdiction of the Securities and Exchange Commission.Wintermute Chief Executive Evgeny Gaevoy said the London-based firm will start trading in crypto-adjacent markets, such as commodities and digital-asset exchange-traded funds. It will expand into tokenized stocks should U.S. regulators greenlight them."It's part of our strategy to be prepared for all possible futures," Gaevoy said in an interview. "We are already present on all the centralized and decentralized exchanges. Broker dealer unlocks new opportunities."The contextGaevoy, a former trader at high-frequency trading firm Optiver, co-founded Wintermute in 2017. The firm processed $3.5 trillion in total trading volume last year and currently averages daily trading volume of $10 billion. Its operations span more than 60 venues ranging from the Chicago Mercantile Exchange to the decentralized crypto exchange Uniswap.He said Wintermute USA, which has already lined up ETF issuers as clients, aims to rival top market-making firms Jump Trading, Jane Street and Citadel Securities in three to five years.Wintermute's expansion into the U.S. and traditional finance comes amid a nearly yearlong crypto slump that has dented prices and dampened investor sentiment for digital assets.Meanwhile, legislation known as the Clarity Act, which would represent the first regulatory framework expected to usher in wider acceptance of digital assets, has stalled.The big pictureMany crypto-centric firms have expanded into traditional financial services such as equities trading and wealth management to grow less dependent on a notoriously volatile market for digital currencies. Some have obtained their broker-dealer licenses through acquisitions.Last year, crypto firm Ripple paid $1.25 billion for prime broker Hidden Road, a registered broker-dealer. And crypto market maker GSR secured a U.S. foothold by buying Equilibrium Capital Services. In 2024, crypto exchange Crypto.com acquired SEC-registered broker-dealer Watchdog Capital.Write to Vicky Ge Huang at [email protected]