One-fifth of financial firms are thinking about getting involved with cryptocurrency trading within the next year, according to a recent poll by Thomson Reuters. Earlier this month, Goldman Sachs said it is planning a bitcoin (BTC) trading desk.
But if Triad Securities, a New York-based investment brokerage and advisory firm, is any indication, many Wall Street companies may be reluctant to help clients invest in cryptocurrencies until there’s more clarity about how they’ll be regulated.
“We’re not going to take bets and then have regulators say, ‘You made the wrong bet, here’s your fine,’ or ‘You’re out of business,’” Scott Daspin, Triad’s director of sales, tells ThirtyK.
Different federal regulators have different views on how to classify cryptocurrencies. That makes some brokerages wary.
The firm, which tracks initial public offerings, has been watching the cryptocurrency market from afar for about a year. Surging client inquiries about initial coin offerings, or ICOs, prompted Triad to conduct client-interest surveys, attend crypto conferences and learn about the underlying blockchain technology.
Triad’s traditional clients have historically traded around the new equity issuance calendar, according to Michael Bird, senior managing director at the firm, but are increasingly looking with interest at new cryptocurrency issuance.
“A lot of our clients have started looking at this space,” Bird tells ThirtyK. “Some have started investing in it. Others are looking to us to help give them direction.”
For now, Triad is waiting on the regulators to figure out what they are doing.
There is no single, definitive federal regulation on bitcoin, other cryptocurrencies and ICOs. Different federal regulators have different views on how to classify cryptocurrencies. For example, SEC Chairman Jay Clayton has said bitcoin qualifies as a currency, while the Commodity Futures Trading Commission, which in charge of regulating derivatives such as futures, designates cryptocurrencies as commodities.
