This partnership comes at a time when cryptocurrency exchanges across the U.S. are expanding the breadth of their operations.

Bittrex, a major U.S.-based digital asset exchange, is expanding its role in the financial sector. The firm is partnering with Rialto Trading to design a new platform for blockchain-based asset transactions. While there is currently no timeline for regulatory approval, both firms are having "detailed conversations" with the authorities.

Blockchain-Based Securities

Blockchain-based securities are assets that can be traded under the oversight of the SEC and the FINRA. They are distinct from cryptocurrencies, security tokens, and collectibles which are not included in the U.S. regulatory framework. In order to list regulated blockchain-based securities, an exchange must have a broker-dealer license, an alternative trading systems license and a registered investment advisor license.

These licenses can be obtained through acquisitions or partnerships with a firm that already has them.

Realto Trading currently operates a fully licensed and regulated fixed income platform and will join forces with Bittrex to expand into registered virtual securities pending approval from the SEC.

According to Bittrex's CEO, Bill Shihara,

We’re merging Bittrex’s technology, cybersecurity, and blockchain expertise with Rialto’s deep knowledge of the securities industry

This partnership comes at a time when cryptocurrency exchanges across the U.S. are expanding the breadth of their operations by moving into more mainstream financial operations. Coinbase, America's largest exchange, recently made a similar move through its acquisition of Keystone Capital Corp, a fully licensed broker-dealer that will also market blockchain-based securities. Bittrex's move is unique because it involves a partnership instead of a buyout.