Wallet provider Blockchain has launched an OTC trading desk

Quick Take

  • Blockchain, the wallet provider, has launched an OTC trading desk.
  • It is a small part of the firm’s push to gain institutional business in the crypto market.
  • It is being run by Vince Machi, a former trader at DRW.

Another cryptocurrency firm is breaking into the over-the-counter trading business.

Blockchain, the European cryptocurrency wallet provider, has launched in recent weeks an OTC desk to execute large trades off of public exchanges such as a Coinbase or Kraken, according a person familiar with the firm’s business. The new desk is being run by former DRW fixed-income trader Vince Machi, according to a source.

The business is part of a broader push by Blockchain, which is one of the best-known companies in the nascent digital currency market, to attract more business from institutions, including large asset managers and hedge funds. Its retail business already covers 28 million wallets, according to marketing materials on its website.

The firm’s institutional efforts are being spearheaded by Jamie Selway, previously US head of execution services at ITG, the institutional broker. Selway’s move to Blockchain was first reported by Nicole Bullock of the Financial Times in early August.

Selway, who is known in trading circles for his market structure expertise, joined Breanne Madigan, a former executive at Goldman Sachs who joined Blockchain in April 2018.

The desk, to be sure, is not a main priority of Blockchain’s institutional efforts. Those also span custody and other developments to help improve the market structure of crypto, which is known for its spine-tingly volatility and manipulation.

Blockchain joins a crowded market of OTC providers, including DRW and DV Trading in Chicago. Cryptocurrency exchanges such as Kraken and itBit also operate over-the-counter trading operations.

The point of the desk, according to a source, is to position the firm for the market’s next bull-run, rather than to aggressively cut into the market-share of existing players.