World’s biggest inter-dealer broker TP ICAP launches crypto ETPs

The world’s biggest inter-dealer broker TP ICAP said on Monday it has launched crypto-related exchange-traded products (ETPs) for its European clients.

The company facilitates trades between hedge funds, investment banks and large financial institutions.

It said it had already executed the first crypto trade with Wall Street heavyweight Goldman Sachs. It traded the ETC Group Physical Bitcoin, a physically backed equity instrument, which is traded on Xetra, against the CME Bitcoin Future. DRW, Flow Traders and Jane Street provided liquidity.  

These ETPs are a way for firms to gain exposure to crypto assets without directly touching them. 

TP ICAP has had a crypto working group since 2017 and first provided liquidity to its clients on CME crypto products in 2019, Duncan Trenholme, co-head of digital assets at TP ICAP told The Block. 

In the coming months, the company will look to expand to offer exchange-traded funds (ETFs) in the US. 

“It’s a natural progression for us, and is in line with client demand,” Simon Forster, co-head of digital assets at TP ICAP, told The Block.

TP ICAP’s focus for 2022 is the launch of its spot trading platform, which will allow customers to trade physical bitcoin for the first time. It’s an instrument that uses external custodians to clear and settle the product.

It is also exploring over-the-counter (OTC) derivatives, such as swaps and OTC options.

New products will follow the company’s Financial Conduct Authority anti-money laundering and combating the financing of terrorism (AML/CFT) registration requirements. 

“Once we get that we’ll be in a good position to launch the spot platform,” said Trenholme. The company is targeting the second quarter for spot trading and OTC derivatives will follow with internal approvals and client demand, he added. 

In recent years the company has expanded its customer base to what Trenholme called some of the “top tier” crypto firms. When asked for details he declined to name names. 

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