Crypto Exchange Blockchain.com Acquires Altonomy’s OTC Desk

CoinDesk and Imperii Partners LLC Mar 21, 2022

Crypto exchange Blockchain.com has acquired Altonomy’s over-the-counter (OTC) trading desk.

Blockchain.com told CoinDesk it’s already integrated Altonomy’s “core systems” with the firm’s existing OTC trading capabilities, according to VP of Markets Dan Bookstaber. Twenty-six Altonomy employees have also moved over, he said.

He declined to disclose the terms of the deal but said only Altonomy’s OTC desk was transferred. Imperii Partners was the exclusive financial advisor to Altonomy. Allen & Overy served as legal advisor to Altonomy.

Altonomy is a digital assets investments, market making and OTC firm founded in 2018, according to Pitchbook. Specializing in altcoins like the recently debuted ApeCoin (APE), its OTC desk pairs buyers and sellers of hard-to-move assets. Bookstaber said Altonomy works with over 1,000 clients.

The deal significantly expands Blockchain.com’s presence in crypto OTC trading. Altonomy handled over $16 billion in spot market OTC trades last year; by comparison, Blockchain.com saw $10 billion in total activity across all its institutional crypto business lines, OTC included. A Blockchain.com representative declined to provide the breakdown.

Altonomy’s client network, its Asia footprint and the altcoin focus was what clinched the deal, Bookstaber said. Blockchain.com already had “one of the larger desks” for OTC options – which are more complex than spot trades – and Altonomy’s business bolsters its altcoin trading capacity.

“Their technology is very good at finding liquidity and managing execution on coins that are much lower liquidity,” Bookstaber said. “They have quite a bit of network within the ecosystem of people who are building these clients, far before they ever get listed.”

The deal comes as big banks are only just waking up to complex crypto trades. On Monday, Goldman Sachs announced it had “facilitated and executed” its first OTC crypto options trade in conjunction with Galaxy Digital. That product was a non-deliverable Bitcoin option.

Read more: Goldman Sachs Conducts First Over-the-Counter Crypto Trade With Galaxy

Trading altcoins via OTC is a different beast entirely. APE and other novel altcoins don’t have well-established and highly liquid markets like bitcoin does – especially in their trading debut.

“The dynamics of a primary listing are just very different from a coin that’s traded for a while on a lot of exchanges,” Bookstaber said.

Ricky Li, co-founder of Altonomy who heads its North America division, said the company’s OTC trading “paid well for us” but it was time to make an exit. Clients wanted borrowing and lending services that Altonomy had little interest in building.

He’s now turning Altonomy toward venture investments and proprietary trading.

“[Now] we just get to manage our own money and trade on the market,” Li said.

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