Coinbase Denies Reports on Takeover of Prime Broker Tagomi
by Aziz Abdel-Qader
Crypto exchange and wallet provider Coinbase said the rumours of acquiring US-based prime broker Tagomi are unfounded and baseless. Coinbase VP of communications Rachael Horwitz denied media reports that his firm bought Tagomi, which specializes in trade execution and digital asset markets, for $150 million.
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Tagomi was co-founded by former HFT technologists including Greg Tusar, global head of electronic trading at Goldman Sachs and Jennifer Campbell from Union Square Ventures. It recently raised $28 million from Peter Thiel’s Founder Fund and Paradigm as well as others.
Tagomi operates as a prime broker in the crypto space, aggregating liquidity across multiple exchanges and executing trades based on a single unified order book. The cryptocurrency prime brokerage has recently launched a lending and borrowing platform.
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The broker also provides its partners with straight-through process and workflow when managing crypto portfolios and trading across many exchanges and other destinations. They also leverage Tagomi’s smart routing and advanced algorithms.
A trio of Wall Street firms
As titans of U.S. cryptocurrency industry were in a race to establish regulated exchanges for tokens deemed to be securities, Coinbase has bought two brokers including a broker-dealer registered with the Wall Street’s independent watchdog, the FINRA.
In 2018,the San Francisco-based company has acquired Keystone Capital Corp in a bid to operate as a regulated broker-dealer. It has also acquired Venovate Marketplace Inc. and Digital Wealth LLC. The acquired businesses offer Coinbase a broker-dealer license (B-D), an alternative trading system license (ATS), and a registered investment advisor (RIA) license.
The move comes as the US Securities and Exchange Commission is seeking legitimate platforms serving as trading venues for digital assets. This topic has received much attention since the SEC made clear that any digital token with an income stream is a security, and furthermore that any entity wants to become an ATS needs to register with the SEC as a broker-dealer and become a member of a self-regulating organization, such as the FINRA.