A bitcoin advocate has launched a new broker/dealer meant to allow financial advisors to trade cryptocurrencies for clients, something the wirehouses have so far prohibited.
Bruce Fenton, founder of the Satoshi Roundtable, a former board member of Overstock’s crypto platform tZERO and former executive director of the Bitcoin Foundation, has registered Watchdog Capital with the Securities and Exchange Commission and Financial Industry Regulatory Authority, CoinDesk.com reports. The firm is a subsidiary of Chainstone Labs, a startup focused on blockchain, tokenization of securities and decentralized asset management.
From CoinDesk.com:
"Watchdog is serving as a back office to crypto and blockchain companies as well as serving individual representatives such as financial advisors. Independent financial consultants can use Watchdog’s license to trade crypto for interested clients.
'They might be at a large wirehouse like Merrill Lynch … In some cases representatives of the firms aren’t even allowed to discuss bitcoin,' he (Fenton) said."
Many large brokerages, including the wirehouses, forbid their reps from trading cryptocurrencies in client accounts. Independent broker/dealers too have been reluctant to incorporate cryptocurrency trading on their platforms. Firms have cited concerns over their sustainability and the risks involved.
But Fenton believes all investable assets will be eventually "tokenized" because it will allow for the frictionless trading and accounting for those investments, including assets beyond public equity.
“You can’t move your Apple shares and you definitely can’t move shares of your local favorite restaurant around the way you can move a token,” he told the publication. “If you can tokenize those investments, it opens up a lot of exciting doors in the way that you can form capital and move money around the world.”