A former private banking executive at Credit Suisse AG has launched a crypto trading venue targeting banks and securities firms as clients, betting on the growing participation of traditional financial companies outside the US in digital-assets.
David Riegelnig, who left Credit Suisse in 2015 as head of operational risk in private banking, co-founded the Zurich-based startup Rulematch, which offers a crypto trading venue for financial institutions only. It has begun trading Bitcoin and Ether and is now open to clients in most of the European Union, the United Kingdom and Singapore, company executives said. It has raised $14 million from investors including ConsenSys Mesh, founded by Ethereum co-creator Joseph Lubin, Flow Traders and FiveT Fintech, and is in the process of raising another round.
While crypto exchanges typically provide a mix of functions including trading and custody of assets, Rulematch seeks to differentiate by being a pure trading platform – matching buying and selling interests – a structure that mirrors that of traditional financial markets. It also allows participants to settle their trades daily on a net basis, a way to improve capital efficiency for traders. While the largest global banks are generally absent in crypto trading, “we do have quite a vibrant scene” in Europe, the UK and certain Asian markets where some banks have ventured into the crypto market, Riegelnig said. “That’s a group which is sometimes overlooked,” he said.
Rulematch currently counts seven banks and securities firms as its initial clients, including Banco Bilbao Vizcaya Argentaria and DLT Finance. Its designated market makers at launch are Flow Traders and Bankhaus Scheich Wertpapierspezialist. It uses software developed by Nasdaq Inc. for matching trades, monitoring risks, and detecting potential market abuse. The crypto market has partially rebounded from a rout in 2022, in part because investors expect the US to allow its first spot Bitcoin exchange-traded funds in coming weeks.
US Securities and Exchange Commission Chair Gary Gensler has long criticized existing crypto platforms for failing to separate different parts of their businesses, such as custody, market-making and trading, which could result in conflicts of interests. In the US, EDX Markets, an institutional crypto exchange backed by Citadel Securities, Fidelity Digital Assets and others, also adopted a “non-custodial” model, meaning that it doesn’t hold clients’ digital assets.
