LGO Markets has launched a new digital exchange with the explicit goal of attracting sidelined institutional investors to the crypto space.
Bring Professionalism to Traditional Exchanges
According to an official blog post, the New Jersey-based LGO Markets cryptocurrency exchange officially launched on March 4, 2019, with limited functionality that will allow institutional investors to set up and fund their respective accounts. Spot trading will formally begin in a week on March 11, 2019.
The platform seeks to take advantage of the ongoing interest in crypto finance from institutional investors, and LGO’s management says they already have gained ten clients who include over-the-counter (OTC) trading desks, hedge fund managers, and other businesses with at least 56 other companies awaiting onboarding the platform.
Hugo Renaudin, the firm’s CEO added that the firm is bringing “professionalism to traditional exchanges” and adding extra services that are made possible by blockchain technology. He said:
“We serve as a bridge between institutional investors and the cryptocurrency markets […] we’re a cryptocurrency exchange for institutional investors.”
LGO Markets plans to use NASDAQ’s custodial model by not holding clients’ funds which allow institutional investors to trade in cryptocurrency with minimal counterparty risks. Interested investors will be required to set up a multi-signature wallet which will need three distinct private keys to gain access.
The first key will be in the custody of the client. The second one will be held by LGO Markets and the third one by Swiss-based partner Altcoinomy.
Investors will also be required to operate a bank account with Signature Bank, which is acting as the exchange’s official banking partner.
Investors will clear every transaction using their private keys after which LGO will pass it on to Altcoinomy, who will play the role of clearing agents and the transaction can only be completed once they clear it with their keys. That, according to Renaudin, is the strong infrastructure that institutional investors have been waiting for.
Give Cryptocurrencies Serious Thought
The LGO Markets launch comes at a time when institutional investors are creeping into the cryptocurrency market as the infamous volatility appears to be dying off.
Leading crypto exchanges like Coinbase have quietly opened an OTCdesk where individuals can buy large amounts of crypto and Poloniex is reported to have begun a similar trading service for institutional clients.
Last month a private and institutional investment adviser Cambridge Associates advised institutional players to give cryptocurrencies a serious thought, something that could augur well for the new digital trading platform.