David Canellis

<div id="highlights-block_dbdd9835e194a0b5d8c4e1b776fdd5da" class="highlights">
 <ul>
 <li>LMAX Group CEO David Mercer believes crypto could overtake gold within the decade</li>
 <li>The firm’s institutional clientele showed strong conviction in bitcoin and ether during the recent chaos</li>
 </ul>
 
</div>



Institutional crypto exchange LMAX Digital just recorded its largest trading day for the year —&nbsp; fueled by bullish sentiment among the world’s top traders.



According to LMAX Group CEO <a href="https://twitter.com/mercerdavid?lang=en" target="_blank" rel="noreferrer noopener">David Mercer</a>, the exchange’s whale-like clientele appear relatively unscathed, despite chaos triggered by the <a href="https://cms.blockworks.co/terra-halted-again-exchanges-delist-spot-trading/" target="_blank" rel="noreferrer noopener">collapse</a> of algorithmic stablecoin UST and its sister token, LUNA.



Mercer told Blockworks $3.3 billion in trades flowed through LMAX Digital last Thursday.



“My institutions traded more than ever,” Mercer said. “They&#8217;re the biggest proprietary trading firms in the world, in Chicago, New York, Amsterdam and London. Their conviction in bitcoin for certain remains undented, with their belief in ethereum apparently the same.”



Mercer declined to specify the firms in question. But the likes of Jump Trading and DRW’s Cumberland fit the profile.



For scale, LMAX Digital saw $1.5 billion daily on average last year, with its top day reaching $6.6 billion on May 19, when bitcoin collapsed from $59,000 to $34,600.



In any case, Mercer said uncertainty and fear pushed LMAX Digital volumes higher. Mercer saw institutions “fleeing to quality,” as his platform “doesn’t dabble in some of the more experimental coins.”



Last Thursday, both bitcoin and ether — the largest cryptocurrencies by market capitalization — rose about 6% during intra-day trading, although some native tokens of crypto exchanges <a href="https://cms.blockworks.co/native-crypto-exchange-tokens-hint-at-first-sign-of-broader-market-recovery/" target="_blank" rel="noreferrer noopener">performed</a> better.



Mercer believes <a href="https://cms.blockworks.co/cryptocurrency-luna-lurches-as-terra-usd-volatility-continues-erasing-billions/" target="_blank" rel="noreferrer noopener">Terra’s demise</a> has a hidden silver lining.



“I might have a slightly different view to most people,” Mercer said. “I mean, people use crypto in a very wide framework. To me, bitcoin is half the market, because as a currency, it’s very stable and robust.



On the other hand, Mercer dubbed decentralized finance (DeFi) an ecosystem of science experiments.&nbsp;



“Pegs generally break, especially if they&#8217;re flawed,” Mercer said, citing sudden devaluations of numerous currencies over the course of history, including George Soros’ successful “attack” on the British pound in 1992, the Euro-Swiss franc collapse in 2015 and the Argentinian peso in 2002.



Still, Mercer wouldn’t call algorithmic stablecoins such as Terra dumb ideas. It was a good idea, backed by some very great minds, he reasoned, “but it didn’t work, and it was upset by normal market dynamics.”



<h3 class="wp-block-heading">The case for collateralized (and audited) stablecoins</h3>



Instead, Mercer is a fan of collateralized stablecoins, such as Circle’s offering, USDC. LMAX Digital accepts USDC.



LMAX Digital combines USDC with USD in one order book and handles margin trade in the stablecoin.



“Don&#8217;t get me wrong, probably 97% of my trading is crypto-to-fiat,” Mercer said. “But some customers arrive and they say, ‘Look, I&#8217;ve got this USDC. It’s easier if it’s in USDC, rather than US dollars.’ That’s fine — I accept USDC and can transfer it immediately, to the extent that those order books are the same.”



But why not USDT? Mercer cited Circle attestations via accounting giant Grant Thornton, which states that every USDC is backed by a US dollar or US Treasury. This doesn’t make USDC a “particularly sexy stablecoin,” Mercer said, but it is collateralized, liquid, and “one is equal to one.”&nbsp;



USDC’s well-documented collateralization allows LMAX Digital to confidently merge its fiat dollar order books with its USDC books.&nbsp;



“We don&#8217;t offer Tether today for one simple reason: that one-to-one ratio is not guaranteed,” Mercer said.&nbsp;



Tether constantly assures the market each USDT is properly backed by a mixture of money market deposits, corporate bonds and the like, but Mercer doesn’t have full faith in the reports Tether produces.&nbsp;



The LMAX chief said Tether needs more transparency before he would accept USDT.



“I&#8217;m a simple guy,” he said. “I’m in traditional markets. Tether is telling me there’s $70 billion USDT in circulation? Just show me the portfolio. I don&#8217;t understand why that can&#8217;t happen. I just want $1.”



As such, Mercer said he would happily embrace <a href="https://blockworks.co/tag/cbdc">CBDCs</a>, or central bank digital currencies  — digital fiat issued by central banks. Fiat is too clunky for crypto markets, and he considers reducing friction in the ecosystem to be the primary use case for stablecoins and CBDCs, saying “it should oil the wheels.”



<h3 class="wp-block-heading">Bullish on crypto’s future</h3>



Finicky stablecoins aside, Mercer is remarkably bullish on crypto’s future, although digital asset trade makes up a small percentage of LMAX Group’s revenue.



Six exchanges fall under the LMAX Group umbrella. LMAX Digital, the institutional crypto platform, represented 15% of LMAX’s total volume, but 40% of revenue last year.



Overall, the group recorded $110 million in revenue from about $6 trillion foreign currency volume, with crypto contributing about $550 billion.



Remarkably, LMAX Digital’s BTC-to-USD pair was its eighth-biggest currency pair across the entire group — euro-to-dollar was No. 1, dollar-to-yen was second, and sterling-to-dollar was third.



By 2025, Mercer believes it will be possible to trade bitcoin against everything: gold, the S&amp;P, euros, the FTSE, nickel and aluminum, “just the same way you can trade dollars against everything.”



He also predicted crypto will overtake gold within the decade. Crypto is currently worth about $1.5 trillion. Gold is between $10 and $12 trillion.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.

Big Money Crypto Traders Still Bullish on BTC and ETH, LMAX CEO Says

Liz Coyne

In this video, Blockworks&#8217; &#8220;<a href="https://youtube.com/playlist?list=PLvER9nHSRN3wZX2tI3JrCLOAzMBgUJtBo" target="_blank" rel="noreferrer noopener">Forward Guidance</a>&#8221; podcast host Jack Farley sat down with David Mercer, CEO, LMAX Group, at Blockworks <a href="https://cms.blockworks.co/events/das-london/" target="_blank" rel="noreferrer noopener">Digital Asset Summit in London</a> to talk about the &#8220;three Ts and two Cs&#8221; stopping institutions from moving headlong into digital assets.



Mercer is the CEO of LMAX Group, a global, high-growth financial technology company based in London. A former City banking executive and currency specialist, he joined LMAX Group in 2011 and after a successful management buyout, rapidly built LMAX Group into the leading operator of institutional FX and cryptocurrency exchanges with offices in 11 countries and a global client base.



An outspoken industry commentator, David is a long-term champion of the UK’s fintech sector and passionate about supporting entrepreneurship in the UK.



Watch the full interview below.



<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="What&#039;s Stopping the Institutional Market from Entering Digital Assets | LMAX Group CEO David Mercer" width="1024" height="576" src="https://www.youtube.com/embed/yqeQeT7kkaQ?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
</div></figure>



<hr class="wp-block-separator"/>



Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.



<hr class="wp-block-separator"/>

What’s Stopping Institutions from Moving Headlong into Digital Assets?

Sam Reynolds

<div id="highlights-block_6149cee651e9a" class="highlights">
 <ul>
 <li>Pyth Network, an oracle platform designed to provide trusted and verifiable market data to decentralized applications</li>
 <li>Oracle networks are essential pieces of blockchain infrastructure</li>
 </ul>
 
</div>



Digital assets merchant bank Galaxy Digital announced today that it has signed a partnership with Pyth Network to serve as an oracle, providing data for its DeFi traders.



An oracle acts as the data gateway between real world information and the blockchain. It is the layer that queries and verifies external data sources for smart contracts, pricing, transactions and payment verification, among other things.



Given the explosive growth of DeFi during the last few years, oracles have <a href="https://cms.blockworks.co/data-for-defi-switzerlands-swisscom-joins-chainlink-as-node-operator/" target="_blank" rel="noreferrer noopener">attracted significant interest </a>from many institutions that are normally in the data provision business, like telecom service providers such as Swisscom which recently <a href="https://cms.blockworks.co/data-for-defi-switzerlands-swisscom-joins-chainlink-as-node-operator/" target="_blank" rel="noreferrer noopener">joined</a> Chainlink, one of the world’s largest <a href="https://cms.blockworks.co/podcast-chainlink-co-founder-on-why-2-trillion-will-flow-into-defi/" target="_blank" rel="noreferrer noopener">oracles</a>, as a node operator.



Pyth, which went live on the Solana blockchain in late August, and was <a href="https://cms.blockworks.co/solana-labs-ceo-shares-roadmap-following-314m-fundraise/" target="_blank" rel="noreferrer noopener">backed by fundraising from Solana Labs</a>, describes itself as an “oracle solution for latency-sensitive financial data that is typically kept&nbsp; behind the &#8216;walled gardens&#8217; of centralized institutions.” Other stakeholders that are also contributing to the Pyth network include some of the biggest names in crypto and finance, such as FTX, Coinshares and DRW Cumberland.



Galaxy’s James Roth says this partnership will include Galaxy providing bitcoin prices in a sub-second timescale to the Pyth Network. Galaxy is the latest in a growing list currently numbering some 20 other firms that provide data to Pyth.



<h3 class="wp-block-heading">&#8216;Better never than late&#8217;</h3>



The first major institutional exchange to join Pyth network <a href="http://has recently been adopted by LMAX, a institutionally-focused digital assets exchange." target="_blank" rel="noreferrer noopener">in June 2021</a> was LMAX Group, a leading operator of execution venues for FX and cryptocurrency trading.



“Speed and reliability are the key to market data — there’s an old motto in market data that is, ‘better never than late’,&#8221; said Mercer. &#8220;The average block in Ethereum is 10 to 15 seconds whereas in Solana, you are talking about being able to update prices a few times a second. For solving market data problems the Solana blockchain is the obvious place for Pyth to be.&#8221;



Mercer added, “We’re in it because it’s the only way a centralized exchange like LMAX Digital can contribute to this fascinating world of decentralized finance. We think that Pyth can be the decentralized oracle solution for market data.&#8221;



A main goal of the Pyth&#8217;s approach is to <a href="https://pythnetwork.medium.com/?p=978aac337e8" target="_blank" rel="noreferrer noopener">reduce dependencies on individual data sources</a>, to provide data feeds that are both reliable and low-latency. This kind of speed is not a feature typically associated with decentralized ledger technology, which replicates state — records of transactions — across many nodes. Solana attempts to maximize speed at the expense of decentralization by processing transactions across a validator set that is an order of magnitude smaller than, for instance, Ethereum.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="768" height="368" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-21-Comparing-Solana-Eth-and-BSC.jpeg" alt="" class="wp-image-8304" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-21-Comparing-Solana-Eth-and-BSC.jpeg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-21-Comparing-Solana-Eth-and-BSC.jpeg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-21-Comparing-Solana-Eth-and-BSC.jpeg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-21-Comparing-Solana-Eth-and-BSC.jpeg?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-21-Comparing-Solana-Eth-and-BSC.jpeg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/2021-09-21-Comparing-Solana-Eth-and-BSC.jpeg?w=80 80w" sizes="(max-width: 768px) 100vw, 768px" /><figcaption>Scaling in layer-1 blockchains always entail tradeoffs; Source: <a href="https://genesisblockhk.com/the-rise-of-solana/" target="_blank" rel="noreferrer noopener">Genesis Block</a></figcaption></figure>



<h3 class="wp-block-heading">Expanding the market</h3>



It&#8217;s early days for this kind of blockchain-based financial application, but Galaxy&#8217;s Roth doesn&#8217;t view the project as experimental.



&#8220;We&#8217;re happy to experiment with lots of things, but that&#8217;s not what I would call this. I would call this something that we see as part of the core infrastructure of DeFi more broadly,” Roth told Blockworks during the Mainnet conference.&nbsp; “Anything that requires the input of a highly trustworthy price&#8230;it&#8217;s not just crypto, it&#8217;s also traditional equity.&#8221;



Roth explained that for Galaxy, they believe that there’s a massive value creation opportunity in being able to create “high fidelity, high quality, and trustworthy data” that sits on the blockchain and powers decentralized applications. After all, there are a world of data providers out there, but even some well-known names <a href="https://www.crowdfundinsider.com/2019/03/145745-coinmarketcap-admits-it-has-data-accuracy-problems-regarding-crypto-exchange-reporting/#:~:text=%E2%80%9CDespite%20its%20widespread%20use%2C%20the,nature%20of%20the%20bitcoin%20market.%E2%80%9D" target="_blank" rel="noreferrer noopener">admitted to data integrity issues</a> in the past. For institutional investors looking to deploy billions into the market, this is going to be unacceptable.&nbsp;



“We’ve been looking to participate in it for some time,” Roth said. Pyth is an outgrowth of the Solana ecosystem, but future plans include support for Ethereum, Binance Smart Chain, and Terra, all of which rely on their own oracle solutions today. As other experts in the field, <a href="https://cms.blockworks.co/podcast-chainlink-co-founder-on-why-2-trillion-will-flow-into-defi/" target="_blank" rel="noreferrer noopener">such as Chainlink&#8217;s Sergey Nazarov</a>, have underscored, the reliability of data from these oracles is essential for the long-term health and growth of DeFi.



Noted Mercer, &#8220;Seeing as we are one of the founder/early contributors [of Pyth], we think that it’s going to be hugely influential and transitional, but look, the business that we’re in is foreign exchange and cryptocurrencies — we trade $30 billion a day — market data and efficient price data is key. That’s the value all of our participants are looking for.&#8221;



<hr class="wp-block-separator"/>



Are you a UK or EU reader that can’t get enough investor-focused content on digital assets?<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Join us</a>&nbsp;in London on November 15th and 16th for the Digital Asset Summit (DAS) London. Use code ARTICLE for £75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Buy it now</a>.



<hr class="wp-block-separator"/>

Galaxy Partners with Pyth to Push Better Bitcoin Pricing On-chain

Brian Nibley

<div id="highlights-block_611a97588d933" class="highlights">
 <ul>
 <li>Institutions need to know they are operating within a compliant system and that their funds are secure. </li>
 <li>Liquidity is important for any trader, both to avoid slippage and ensure trades can be executed in a timely manner</li>
 </ul>
 
</div>



In 2020 and 2021, crypto markets have seen an influx of institutional investors.



An impressive and growing number of money managers, corporations, hedge funds and other institutions have sought an allocation to Bitcoin and other cryptocurrencies.



But accessing this new financial frontier isn’t always easy. Crypto markets generally don’t have the same level of maturity, liquidity or regulation that institutions are accustomed to.



Retail exchanges typically aren’t equipped to provide the kind of trading environment that institutions demand.



<h2 class="wp-block-heading">Here are five things that institutional investors in cryptocurrency must have.</h2>



<h3 class="wp-block-heading">A reliable trading platform</h3>



Retail exchanges have a terrible reputation for being reliable during times of high volatility. Name any mainstream crypto exchange and it’s almost guaranteed that they crashed for a period during the last big crypto correction. Many traders lose money when this happens, as they’re unable to sell before prices dip further or buy before prices rebound.



This would be unacceptable to an institutional investor in cryptocurrency.



Institutional-grade exchanges consider 100% uptime to be key to their service offering, ensuring their customers’ trading strategies can be carried out at any time.



“The most important consideration for an institution when choosing a trading venue is trade execution — encompassing consistency of executions and low latency executions,” according to Campbell Millar, chief operating officer at LMAX Group.&nbsp;



In effect, the first question institutions ask is, “Can I always get reliable execution?” he said.



<div class="wp-block-image"><figure class="aligncenter size-full"><img loading="lazy" decoding="async" width="380" height="380" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/Campbell-Millar-LMAX.jpg" alt="Campbell Millar, LMAX" class="wp-image-6550" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/Campbell-Millar-LMAX.jpg?w=380 380w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/Campbell-Millar-LMAX.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/Campbell-Millar-LMAX.jpg?w=150 150w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/Campbell-Millar-LMAX.jpg?w=257 257w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/Campbell-Millar-LMAX.jpg?w=261 261w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/Campbell-Millar-LMAX.jpg?w=219 219w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/Campbell-Millar-LMAX.jpg?w=80 80w" sizes="(max-width: 380px) 100vw, 380px" /><figcaption>Campbell Millar, chief operating officer, LMAX Group</figcaption></figure></div>



<h3 class="wp-block-heading">Institutional exchange venue controls</h3>



Venue controls are another important part of an institutional-grade trading experience. They reduce opportunities for market manipulators and ensure a level playing field for all market participants.



Venue controls include things like:



<ul><li>Volatility bands</li><li>Order throttle rates</li><li>Clip size bands and limits</li><li>Surveillance controls and alerts</li></ul>



Venue controls are also implemented rigorously on LMAX Digital, as Millar described:



“We have a number of controls designed to create an orderly market. These include volatility bands, order throttle rates, and more traditional risk controls such as working order and clip size limits,” he said.



In addition, <a href="https://www.lmaxdigital.com/overview?utm_source=BWG&amp;utm_medium=article&amp;utm_content=sponsored&amp;utm_campaign=aug2021" target="_blank" rel="noreferrer noopener">LMAX Digital </a>has surveillance alerts that trigger, for example, when a customer’s trading pattern appears to be feigning interest in an attempt to try and move the market, a potential indication of spoofing, or wash trade alerts where simultaneous buy and sell orders are entered by a client where there’s no logical reason for those trades.



<h3 class="wp-block-heading">Depth of liquidity</h3>



Liquidity is important for any trader, both to avoid slippage and ensure trades can be executed in a timely manner.



Crypto markets trade thinly compared to traditional markets in foreign exchange, equities or derivatives.



Exchanges that serve institutions must provide sufficient liquidity for large orders and high trading volumes.



<h3 class="wp-block-heading">Regulatory compliance and secure custodial solutions</h3>



Institutions need to know they are operating within a compliant system and that their funds are secure. These might be the biggest concerns of all in the crypto markets, as regulations remain unclear and securing digital assets can be a burden.



An institutional-grade exchange must function under the purview of a specific regulatory framework that institutions can trust.



Ideally, this involves an exchange entity being regulated by an authority that already has digital asset regulations in place.



The latter bullet is key because of Gibraltar’s crypto-specific regulatory framework, according to Millar. “Gibraltar is a British overseas territory that has a specific crypto regulatory framework, so they provide a regulation for operating a digital exchange,” he said. “We are regulated by the Gibraltar authority and the Gibraltar financial service commission. They operate with very similar principles to the UK FCA (Financial Conduct Authority) which we already work under in the wider LMAX Group’s FCA regulated entities.”



<h3 class="wp-block-heading">Custody</h3>



Institutional investors aren’t going to take ownership of their private keys and hold them on a hardware wallet. Instead, institutions need a robust custody solution they can rely on.



<a href="https://www.lmaxdigital.com/overview?utm_source=BWG&amp;utm_medium=link&amp;utm_content=overview&amp;utm_campaign=44317" target="_blank" rel="noreferrer noopener">LMAX</a><a href="https://www.lmaxdigital.com/overview?utm_source=BWG&amp;utm_medium=article&amp;utm_content=sponsored&amp;utm_campaign=aug2021" target="_blank" rel="noreferrer noopener"> </a><a href="https://www.lmaxdigital.com/overview?utm_source=BWG&amp;utm_medium=link&amp;utm_content=overview&amp;utm_campaign=44317" target="_blank" rel="noreferrer noopener">Digital</a> goes to great lengths to keep customer funds secure. In fact, after consulting with several respected experts in the industry, LMAX Group executives determined their best course of action would be to build a new custody solution of their own making.



As Andrew Phillips, chief technology officer at LMAX Group put it: “We concluded that we needed to write [a custody solution] ourselves. So, we’ve written our own. It’s our own technology from the ground up. We’ve built and architected it in such a way that it makes a lot of sense for our primary customer base.”



Because LMAX Digital uses geographical separation in combination with air-gapped multi-signature cold storage wallets, compromising the system would have to involve infiltrating two highly secure locations. “You need to pull off two Ocean’s Elevens in order to actually access those funds,” said Phillips.



LMAX Digital basically takes everything that the LMAX Group has achieved in foreign exchange and adapts it to a digital asset trading platform. There really isn’t another exchange like it on the market for institutional investors in cryptocurrency, added Phillips.



<h3 class="wp-block-heading">Institutional pricing, access to fiat on-ramps</h3>



In addition to all the above, institutions need to know that their trading platform will provide the following:



<ul><li>Fair competition</li><li>Competitive fees</li><li>Access to fiat on-ramps into crypto assets</li></ul>



Having a level playing field to trade on means competitors won’t have any undue advantage. Low fees make trades more profitable. And moving fiat into crypto is obviously necessary for trading in these markets and can be difficult for those working with large amounts of capital.







LMAX Digital meets all the criteria listed above in ways that exceed expectations. To name a few:



<ul><li>The exchange operates with 100% uptime</li><li>Venue controls ensure an orderly market</li><li>The exchange has proven its capability to handle high volumes during times of extreme volatility</li><li>A custom-built unique custodial solution keeps the majority of funds in deep cold storage</li><li>Regulated under the authority of the British territory of Gibraltar</li></ul>

Top 5 Must-Haves for Institutional Digital Asset Investors

<div id="highlights-block_60f054253aff2" class="highlights">
 <ul>
 <li>LMAX Group has announced an investment round with J.C. Flowers &#038; Co, giving the investor 30% of the company for $300 million at a $1 billion valuation </li>
 <li>LMAX Group CEO said that J.C. Flowers is investing in the cohesion of institutional FX trade and crypto</li>
 </ul>
 
</div>



A few years ago LMAX Group CEO David Mercer knocked on the doors of 34 of the world’s biggest banks to try and get them onboarded to his institutional-grade digital assets trading platform LMAX Digital. <a href="https://cms.blockworks.co/building-the-plumbing-for-institutional-capital-markets/?utm_content=170465284&amp;utm_medium=social&amp;utm_source=twitter&amp;hss_channel=tw-153396300">Back then, they all said ‘not now, David</a>’. Fast forward to today and LMAX Group has closed a round with one of the world’s pre-eminent financial investors valuing the company at $1 billion.



The transaction remains subject to regulatory approval.



According to a press release, J.C. Flowers &amp; Co is set to take a 30% stake in LMAX Group for $300 million in a secondary share sale by LMAX Group employees. LMAX Group says that they will use the fundraise for a global expansion, particularly in the U.S. and Asia. In addition to a digital assets desk, LMAX Group also operates a sizable foreign exchange business.&nbsp;&nbsp;



“J.C. Flowers invested in the business model. The vision we share is that LMAX Group becomes the preeminent player in global capital markets and the market leader of FX and cryptocurrency trading,” Mercer told Blockworks in an interview. “With our technology, we can leverage any asset class in the world. We took it and applied it to crypto right alongside foreign exchange”.



Mercer is quick to point out that LMAX Digital, the crypto desk, with its small group of institutional traders, is second only to Coinbase in volume. <a href="https://investor.coinbase.com/news/news-details/2021/Coinbase-Announces-First-Quarter-2021-Estimated-Results-and-Full-Year-2021-Outlook/default.aspx">Coinbase reports</a> 6.1 million monthly transacting users.



“LMAX Group is an exciting and well-respected company with a leading position in a market with great potential, making it a highly compelling opportunity for our Firm,” Chris Flowers, Managing Director and CEO, J.C. Flowers &amp; Co, said in a release. “The LMAX Group exchange infrastructure offers&nbsp;efficiency and transparency, both of which are in high demand by the growing numbers of institutional&nbsp; participants in foreign exchange and cryptocurrency trading.”



40% of LMAX Digital clients also trade another asset class, Mercer notes, and he said that the company is planning to use the fundraise to further the cohesion of FX and digital assets.&nbsp;



One cohesion of the asset classes will be the expansion of LMAX Group’s FX trading hours to match crypto’s. Before, the company listed its FX products 24 hours a day, 5 days a week. But, it will be expanding them to match crypto’s 24/7/365 market.&nbsp;



“That’s the future. People want to trade 24 hours a day, 7 days a week. We believe LMAX Group will lead the way in this new era of capital markets,” Mercer said. “Otherwise this great technology will just sit in a data center, collecting dust.”