Digital currency trader and lender Genesis Global Trading is moving toward full-service prime brokerage with the acquisition of crypto custodian Vo1t, the company announced Thursday.
The New York-based trading firm, which is a subsidiary of CoinDesk parent firm Digital Currency Group, acquired Vo1t to begin developing a full suite of prime brokerage services under one roof including lending, trading and custody. The terms of the deal were not disclosed.
“We’re coming at this after having a successful business on the trading and lending side,” said Genesis CEO Michael Moro. “The goal is for clients to be able to do any and all activities with Genesis.”
In traditional finance, prime brokerage refers to a bundle of specialized services offered by investment banks and securities dealers to their hedge fund clients. This is the first time Genesis has disclosed its strategy to become a prime brokerage.
There are a few prime brokers in the crypto space, including New York-based Tagomi, which joined Facebook’s Libra Association in February. Digital asset services firm Bequant also announced a full suite of prime brokerage services and 18 sources of liquidity earlier this month.
Moro wouldn’t put a figure on the number of liquidity providers Genesis is aiming to plug into.
“The answer is as many as we can that we feel good about,” he said. “We’re trading roughly $1 billion of crypto a month, and clearly we have enough liquidity venues for us to trade that much.”
Genesis also announced plans to soon offer a derivatives trading desk, which would start with over-the-counter bitcoin options. It’s also interested in providing capital introduction for family offices that are looking for crypto hedge funds that have the strategies, fee structure and asset exposure to fit their investing needs.
“We’re curating the hedge funds worth talking to, based on the criteria you’re looking for,” Moro said.
Vo1t will also be Genesis’ first London office. The firm, whose name is supposed to remind customers of a bank vault, provides custody, lending, staking and trading products for 35 digital assets. Since 2017, Vo1t has been offering cold storage to firms listed on the Financial Times Stock Exchange, trust companies and other financial institutions around the world. It advertises a 45-minute withdrawal time for assets held in cold storage.
Moro began to pursue a deal with Vo1t last autumn after seeing how many services the startup’s team had produced with few resources. The companies are now in the middle of integrating products.
“We’re going to keep working on the acquisition integration,” he said. “There’s quite a bit of work to be done to absorb this platform and their technology.”
Genesis is also expanding into Singapore after registering with the Monetary Authority of Singapore and will send employees from New York to the new office once it is safe to do so. With 30% to 40% of the firm’s lending business coming out of Asia, the office will give Genesis more flexibility to serve customers in the region.
“Having New York, London and Singapore helps for different time zones,” Moro said. “Especially since crypto trades 24 hours a day … and our clientele is diverse across Europe, Asia and the U.S.”