Hidden Road Introduces OTC Prime Brokerage for Crypto

Hidden Road, a credit network for institutional investors, has launched what it called the trading industry’s first over-the-counter (OTC) prime brokerage service for digital assets.

The launch comes three months after Hidden Road secured $50 million from its Series A funding round which was led by Castle Island and saw participation from crypto exchanges FTX and Coinbase, among others.

The new platform, which it said has already onboarded the majority of the top 25 global liquidity providers, caters to both US and international counterparties, Hidden Road announced on Thursday in a press statement.

Michael Higgins, the Global Head of Business Development at Hidden Road, explained that the platform is its response to the demand for a "real prime brokerage solution for OTC trading of digital assets" among institutional clients.

“The market was in need of a truly conflict-free prime broker, one without a proprietary trading desk, OTC liquidity desk or market-making operation," the former FXCM senior executive noted.

“Hidden Road provides a credit network and a true prime brokerage solution for digital assets, encompassing margin netting, financing of trading and centralized market access to leading global OTC liquidity providers," he added.

Unique Features?

According to Hidden Road, the new service reduces credit, settlement and operational risks and offers new operational and capital efficiencies for institutional investors.

The platform achieves this by deploying a new method that nets positions across all liquidity providers and trading venues, it noted.

Furthermore, the platform “eliminates the need to onboard and negotiate multiple bilateral relationships” by improving access to liquidity and expanding distribution.

Support for the New Platform

Meanwhile, Hidden Road said liquidity providers such as Virtu, XBTO Global, AlphaLab, Enigma Securities and Da Vinci Securities, among others, are already on the platform.

Moreover, the credit network has secured the support of six independent software vendors: CoinRoutes, Goid-i, 40TC, Eldwood Tech, Reactive and Talos.

Furthermore, trading platforms and electronic network communications (ECNs) operators, such as 24x, Crossover Markets and Spotex, are supporting the crypto-focused OTC prime brokerage.

Additionally, Cypator, Finery Markets and Enclave Markets are the other ECNs that support the new digital assets-focused OTC prime brokerage, the credit network said.

Hidden Road explained that its goal with the new platform is to facilitate OTC trading between market participants by acting as an intermediary and credit counterparty for trades executed bilaterally by liquidity providers or counterparties.

“Hidden Road's OTC prime brokerage will further institutional adoption of digital assets by giving counterparties full ownership and control over their execution technology, liquidity and custodian choice for both fiat and digital assets,” the credit network explained.