Surveillance Firm Launches Launches Push Towards Crypto Market Safety With 16 Other Industry Leaders

New York-based crypto surveillance firm Solidus Labs is teaming up with leading digital asset exchanges, trading firms and industry associations to launch a new crypto market safety initiative.

In a statement, the Crypto Market Integrity Coalition (CMIC) outlines how it will make the crypto market a safer space amid the emergence of new risks.

“The market integrity pledge introduced by the coalition is focused on a commitment to continuously strive towards higher standards of market integrity, risk monitoring, consumer protection and compliance, in order to maintain fair and orderly digital asset markets and prevent market abuse. “

The initiative also wants to engage with regulators to address the challenges in the industry.

“Over time, the coalition will take further steps, including advancing training programs, sharing insights and research, dialoguing with regulators, and considering data-sharing and shared-surveillance frameworks that can address crypto and decentralized finance’s unique cross-market supervision challenges.”

Solidus Labs initiated the formation of the group and co-founded the coalition with 16 other industry leaders, namely Coinbase, Circle Internet Financial, GSR, Huobi Tech, Anchorage Digital, CrossTower, BitMex, Bitstamp, Securrency, Elwood Technologies, CryptoCompare, MV Index Solutions, Global Digital Finance, the Chamber of Digital Commerce, CryptoUK, and Liberty City Ventures.

The CMIC says it is inviting other members of the crypto community to join the coalition.

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CrossTower Launches Bitcoin Fund to Compete With Grayscale’s GBTC

Crypto capital markets firm CrossTower is launching a hedge fund at the end of the month in a bid to compete with Grayscale’s Bitcoin Trust (GBTC) and other bitcoin funds for accredited investors.

Similar to how Tesla’s boom created a larger demand for electric-vehicle stocks, the success of GBTC with $20 billion in assets under management (AUM) has caused a plethora of funds to follow suit, said crypto analyst Kevin Rooke. (Grayscale is owned by Digital Currency Group, the parent company of CoinDesk.) 

CrossTower Bitcoin Fund won’t trade in a secondary market, but it is trying to compete on management fees and liquidity. 

The fund charges a management fee of 60 basis points or 0.6% compared to GBTC’s 2% management fee, said CrossTower CEO Kristin Boggiano. It trades at net asset value (NAV) of bitcoin and has no lockups, letting investors redeem within a day. 

“This is the most plain-vanilla of the suite of offerings that we expect to be popular,” Boggiano said. “We’re building infrastructure at CrossTower so that entities that want to shape their risk have different instruments – whether they want to use an exchange, they want a loan, they want to go short.”

The minimum investment amount is $100,000 and CrossTower has a $20 million AUM from early investors to start. The product has seen the most interest from family offices, Boggiano added. 

“That’s a definite huge perk for family offices,” James Seyffart, ETF research analyst at Bloomberg Intelligence, said in reference to no lockups on the fund. “It’s very unusual for a fund structured like this to offer daily liquidity.”

CrossTower has hired Grant Thornton as the accounting firm for the fund, law firm Apex as the administrator and Anchorage as the custodian. (The fund eats the cost of custodial and legal fees, Boggiano said.)

It’s also a way for U.S. investors with offshore accounts to get exposure to bitcoin from foreign tax havens. 

The fund is only offered to accredited investors and has a traditional master-feeder structure, which is an investment vehicle that allows CrossTower to pool capital from investors in the U.S. and around the world. Non-U.S. entities and companies with offshore entities can use the master fund to invest in a U.S. tax-exempt environment. 

The fund is limited to 99 U.S. investors but is open to an unlimited number of offshore investors because of how the fund was structured for daily redemptions, Boggiano said. Other fund structures in Bermuda that are more capital-intensive would allow CrossTower to capture more of the U.S. market.



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CrossTower Launches Capital Markets Desk to Bring Institutions to Its Spot Exchange

Crypto trading platform CrossTower is launching a capital markets desk for institutional clients.

Leading the desk is securities industry veteran Greg Bunn, who’s being hired as CrossTower’s chief strategy officer. Previously, Bunn served as global head of counterparty strategy at foreign exchange giant Citadel, and he also worked in senior roles at Deutsche Bank for more than 16 years.

Expanding from its spot exchange and over-the-counter (OTC) trading desk, CrossTower now offers digital asset lending, trade financing, structured products and trade execution across multiple venues. 

“Ultimately we end up with something that looks and feels a little bit like what you see in the prime brokerage space,” Bunn said. “You can’t centralize the market because it’s by definition decentralized, but you will at least have more connected infrastructure that makes the market more efficient.”

Prime brokers are facilitators for financing and trading for deep-pocketed institutional investors.

Several crypto firms including Bequant, Coinbase, BitGo and Genesis Trading have announced in recent months their plans to build out their prime brokerage arms.

“I would say the biggest fund that we have on board is around $500 million [assets under management],” Bunn said. “What we’ve done is to meet the standards of an industrial-grade regulated securities exchange.”

While CrossTower is not targeting retail users with the capital markets desk, it is in discussions with “retail intermediaries” like wallet aggregators about becoming an exclusive partner for trade execution and financing, Bunn said.



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