Three of the world’s leading banks — Citigroup, BNY Mellon and Wells Fargo — have joined a funding round for a US cryptocurrency trading technology developer, highlighting the work currently being done on Wall Street to prepare for increased adoption of digital assets .
The $105 million Series B funding, due to be announced Tuesday, values the company, called Talos, at $1.25 billion. Led by tech investor General Atlantic, the round also includes former Talos backers such as Fidelity Investments and venture capital investors Andreessen Horowitz and PayPal Ventures.
The deal comes as crypto prices plummet and many of the big powers in traditional finance await greater regulatory clarity to make crucial decisions on digital asset strategies.
It shows that financial groups are behind the scenes looking at ways to make crypto trading safer for institutional investors and preparing for the prospect of traditional assets taking digital form – as tokens residing on blockchains, the technology underlying cryptocurrencies.
“We see crypto as the tip of the spear,” said Mike Demissie, head of digital assets and advanced solutions at BNY Mellon, which has over $45.5 trillion in assets under custody or under management and $2.3 trillion in assets under management assets. “Other types of assets will be tokenized and made available on this type of infrastructure.”
Talos occupies one of the less sensitive corners of the crypto business, essentially building computer installations for institutional investors who are responsible for making trades on the best terms for their clients. The offering helps clients see prices on leading exchanges and market makers in one place and provide instructions for all stages of a trade – even complex algorithmic ones.
“Our job is to make sure our clients can connect,” said CEO Anton Katz, an MIT-trained software engineer whose previous experience is as head of trading technology at AQR Capital Management, a hedge fund, and as a member of competitions belongs to the Israel National Rifle Team. “We are the rails.”
Katz said he expects Talos to handle a greater variety of digital assets in the coming years as trading methods developed in crypto find application in traditional finance.
“The experiments that are happening in crypto are pushing other asset classes to see what can be done more optimally, what can be done differently,” he said. “The vast majority of our conversations with major institutions right now are literally about – what impact this technology will have on the existing ecosystem.”
Aaron Goldman, managing director and co-head of financial services at General Atlantic, said Talos is well-positioned to grow as the “casual” ways of the early crypto industry give way to greater involvement from institutional investors with fiduciary responsibilities.
“We’re moving away from a previous era where trades were executed by calling your buddy and telling your clients I’m trading with her because I know she has the best prices,” Goldman said.
He added: “Now the market structure is developing. You have to show people that you were able to go to the market, see different prices and execute in the most efficient and thoughtful way, and later you can go back and check and prove that you got the best execution. “
Source: Crypto News Austria