TradeStation Builds Out Crypto Trading Arm With ErisX Tie-Up

TradeStation is plugging into crypto exchange ErisX as it seeks to enhance digital asset trading for its pro and institutional clients.

The online brokerage and trading technology firm said Wednesday it is integrating ErisX's order book into its subsidiary, TradeStation Crypto, to provide clients with deeper liquidity and tighter spreads when trading digital assets.

Both TradeStation and ErisX believe the tie-up will take market infrastructure up to the same sort of standards as already exist in traditional markets. They hope to coax a new generation of participants – who may trade other assets but are uncertain about digital assets – into dipping a toe into the crypto trading space.

"Adding this digital-asset exchange relationship helps improve our customers’ view of prices across more connected markets,” said James Putra, TradeStation Crypto's director of product strategy. ErisX CEO Thomas Chippas said just working with an established name like TradeStation would help instill confidence in traders interested in the new asset class.

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TradeStation – which only opened its crypto brokerage last May – offers brokerage and tech solutions for active traders. It generally focuses on professional clients, which include hedge funds, family offices and money managers.

These clients will now be able to access ErisX in order to trade bitcoin, bitcoin cash, litecoin and ether.

TradeStation is a wholly owned subsidiary of Japanese financial services group Monex. Among its other holdings, the group owns a cryptocurrency research and development house as well as CoinCheck, acquired after that exchange fell victim to a $500 million hack in early 2018.

Launching initially as a cash-settled derivative swaps exchange in 2010, ErisX pivoted into cryptocurrencies during the boom time in 2017. The Commodity Futures Trading Commission (CFTC) approved it as a registered clearing organization in July 2019, and the exchange started offering physically settled bitcoin derivatives back in December.

See also: New Settlement Layer to Offer Asian Crypto Institutions Local Alternative to Silvergate Bank

Institutional-facing Fidelity Digital Assets became a member of ErisX's clearinghouse just last week, using the exchange's orderbook for liquidity and to minimize counterparty risk. Chippas didn't disclose the number of entities using its clearinghouse, but told CoinDesk at the time that TradeStation was a member.

In fact, today's tie-up could have been in the works for more than a year. ErisX only launched its spot market orderbook in April 2019 following the third round of its Series B raise. Among the many funds – that together invested more than $20 million – was TradeStation.