One of Bitcoin's earliest entrepreneurs, Jered Kenna, has joined TradeZero as the head of the company's new Digital Currency Exchange division. Based in the Bahamas, and licensed and regulated by the local Securities Commission, TradeZero provides direct market access to US exchanges.
“We are looking to provide the non US investor with the same access, tools and discounted commission structure that many US traders enjoy today.”
- Daniel Pipitone, TradeZero Inc Director
The new Digital Currency platform is designed for individuals and institutions that want to trade large volumes of Bitcoin. Clients get access to a commission-free dark pools for digital currency trading.
Dark pools are simply private markets for securities, typically stocks and currencies, allowing investors to make big purchases or sales privately, and without substantially moving the market price.
According to SEC Commissioner Kara M. Stein, nearly 20 percent of the trading volume in securities markets takes place on Alternative Trading Systems (ATS), including dark pools. Commissioner Stein even noted in November 2015 that Blockchain tech could revolutionize regulation in the market.
In early February, the US Securities and Exchange Commission and the New York attorney general fined Barclays and Credit Suisse $154m for their US ‘dark pool’ trading operations, settling both federal and state cases against the banks.
“All across the capital markets, technology and innovation are challenging the old ways of transacting business and old ways of thinking about regulation.”
- Kara M. Stein, SEC Commissioner
The first bitcoin dark pool was Kenna's Tradehill, which started trading in 2011. Kraken, the largest Bitcoin exchange in euro volume launched a dark pool in 2015. One of China's largest exchanges, LakeBTC, has a dark pool that any customer can access for a minimum of 50 bitcoins. The minimum opening balance at TradeZero is US$10,000 or equivalent, and Bitcoin is accepted as a payment option.
Tradehill was founded in the early days of bitcoin trading, and was the number two exchange by volume behind MtGOX up until August 2013. Kenna's startup was the very first bitcoin exchange to register with FinCEN, and could have easily become the world's most popular bitcoin exchange had it not lost its banking partners.
On August 30th, 2013, Kenna announced that Tradehill was 'temporarily' closing down all trading, subject to establishing banking relationships. However, after losing both Dwolla and then the Internet Credit Union, Kenna couldn't find another partner that would work with a Bitcoin service company.
Kenna additionally controlled the domain Bitcoin.com, but had to return it to the owner when Tradehill ceased trading. Since then, he's remained a strong proponent of bitcoin, opening a bitcoin-only hacker house in SF, and producing a now-defunct bitcoin-friendly video report known as Money & Tech.
Unlike other stock markets, Kenna feels that the global slowdown won't draw investors away from TradeZero. “As larger mainstream investors wish to diversify from the stock market during this time of heightened global uncertainty and high P/E ratios,” noted Kenna, “TradeZero will allow for making of sizeable trades without raising market price or alerting others to their positions.”
“I’ve been bullish on bitcoin since it was two cents and this platform is another great enabler in letting institutional and individual investors alike trade in bitcoin without market depth risk.”
- Jered Kenna, TradeZero
TradeZero believes it offers one of the safest ways to buy or sell bitcoins, and secures each transaction with a multiple-signature process using the popular bitcoin wallet vendor Bitgo.
While Bitgo has made headlines as the wallet provider for Bitfinex, which just suffered a 1200 BTC theft, many other exchanges including Bitstamp and Kraken have chosen to stick with Bitgo. The exchanges claim that Bitfinex did not properly implement their Bitgo integration.