A pair of former Jefferies Financial Group Inc. executives have formed Crossover Markets Group Inc., a cryptocurrency exchange for institutional investors.
Brandon Mulvihill and Anthony Mazzarese, who were two of the top executives in Jefferies’s foreign-exchange prime brokerage division, teamed up with Vlad Rysin, previously chief technology officer at Euronext FX, to found the company, according to a statement. The three are in the process of closing a seed round of funding and plan to debut the exchange “late summer to early fall.”
Institutional investors’ interest in digital assets has swelled in recent years and professional investors traded $1.14 trillion of cryptocurrencies on Coinbase Global Inc., compared with $120 billion in 2020. Still, just 18% of institutional investors in the U.S. in a Fidelity survey said they had bought or invested in digital assets as of last year.
“While the vast majority of traditional institutional clients are not yet in crypto, we believe this is rapidly changing,” Mulvihill said in the statement. “As the market matures, so should the technological advancements of the exchanges.”
Crossover Markets will seek to offer improved technology that speeds up cryptocurrency trading and reduces the latency -- or the amount of time that passes from the moment a trade is initiated to its receipt -- in digital assets, according to the statement.
“There seems to be a notion that latency doesn’t matter when it comes to trading crypto. We disagree” Mazzarese said. “We polled our network of institutional relationships globally and one of the biggest and most common requirements was reliable 24/7 technology with the same service levels and customization features they are accustomed to in other markets such as FX or equities. This is exactly what Crossover Markets will provide.”
Mulvihill led Jefferies’s foreign-exchange prime brokerage globally, while Mazzarese oversaw distribution. When the two left Jefferies last month, they said they had been interested in digital assets since examining crypto non-deliverable forward contracts in 2018. Rysin, for his part, was also previously head of core electronic trading at Credit Suisse Group AG and chief technology officer of the firm’s trading division focused on fixed income, currencies and commodities.
Crossover Markets’ move comes after the investment firm J.C. Flowers & Co. agreed to acquire a 30% stake in LMAX Group for $300 million, valuing the cryptocurrency exchange at $1 billion last year. Coinbase has also been expanding its own institutional offering, while rival FTX last month debuted a unit designed to help it gain institutional clients.
“While it is still very early for institutional clients joining crypto, we are building our exchange for the future and are excited to become a primary venue for digital assets,” Rysin said.
This article was provided by Bloomberg News.