Equities market maker IMC says it’s ‘shaping the crypto space’

IMC, an algorithmic market maker specializing in ETFs and options, has snapped up its second cryptocurrency firm. This acquisition seems to suggest an acceleration of the company’s expansion into the cryptocurrency sector.

This week, IMC finalized the acquisition of Altas Technologies, a Netherlands-based technology and trading firm. Altas Technologies specializes in “machine learning and portfolio management capabilities for crypto trading,” according to a statement released by the companies on Wednesday.

Terms of the deal — which appears to be a notable indicator of IMC’s deep crypto aspirations and investments accordingly — were not disclosed. 

It’s not the first push into cryptocurrency trading and execution for IMC, which maintains offices throughout Europe, as well as in India and the United States. A spokesperson for the company told Blockworks that the business has been “building out our crypto capabilities” over the last two to three years.

Case in point: IMC in December 2022 finalized terms on an agreement to acquire Tensor Technologies of Switzerland, an algorithmic developer of trading strategies focused on providing market liquidity — including cryptocurrencies. That deal, for which terms were not disclosed, appears to be IMC’s first notable purchase of a crypto company.

In its 2022 annual report, IMC said the acquisition demonstrated its “continued commitment to shaping the crypto space.” 

The company had started moving into crypto in 2021, it said in the report, positioning 2022 as taking “further exploratory steps to develop our knowledge base and crypto-trading set-ups.”

Its executives appear to have pumped the brakes on expansion plans last year, given the fourth quarter collapse of FTX and the decline in digital assets industry-wide.

“As market turbulence and uncertainty steadily increased over the course of the year, we de-risked our exposure to the crypto space, protecting us from potential trading losses,” the report said.

Operating a proprietary trading arm, which could have booked some of those crypto losses, it’s unclear whether IMC has been making markets with third parties in cryptocurrencies or working with exchanges along those lines. 

IMC’s latest crypto capital outlay

IMC is positioning its most recent purchase, of Altas Technologies, as adding new markets, including select cryptocurrencies, to its market making trading roster. The firm historically has been known for its focus on exchange-traded products and options on equities. 

The company is touting its purchase as a mechanism to cut down on costs, as denominated by spreads, for providing liquidity across various financial instruments. 

“This acquisition adds to our ML and AI capabilities which can be used in support of our market making strategies,” the spokesperson told Blockworks.

Additional indications of IMC’s crypto endeavors have popped up across other business lines separate from its core trading units. This includes the 2022 formation of IMC Investments; the company’s first venture capital arm, which focuses on early-stage investments.

IMC Investments, which taps shareholder capital — versus raising outside limited partner capital for venture funds — has already made a number of significant crypto investments and inked partnerships with key industry players. 

The extent of its dealings appear to reflect sizable amounts of capital and firm resources being allocated to digital assets. 

IMC has invested in Paradigm, the crypto institutionally focused derivative trading firm. And it’s also taken stakes in a slew of other digital asset operators, most focused on trading, including GFO-X, Thalex, Cboe Digital and MEMX. 

The company has also linked with Pyth Network, which uses a system of oracles to publish crypto pricing data across several chains, to serve as a partner for providing cryptocurrency pricing data based on its trading of those assets.

Updated July 31, 2023 at 8:41 am ET: Changed references of IMC Ventures to IMC Investments.

---

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.