Bittrex, a US-based cryptocurrency exchange, announced a partnership with Rialto Trading, a registered broker-dealer in the United States.

The partnership, which was revealed on Thursday, will see the two companies develop a new trading platform for blockchain-based digital securities assets.

Rialto currently runs a US-registered and regulated alternative trading systems (ATS) platform offering fixed income products.

Partnership awaiting regulatory approval

Rialto is awaiting approval from relevant government regulators before extending its services to include the offering of registered blockchain-based securities tokens, a statement from the two companies said.

Both companies have exhibited confidence that the deal will get approval for the regulators. However, they haven’t been able to give a tentative timeframe within which the new platform might be ready for launch.

The new platform will incorporate the regulated ATS features of Rialto and the robust state-of-the-art crypto exchange infrastructure from Bittrex.

Rialto CEO Shari Noonan is optimistic the platform’s experience will play a huge role in the success of the new venture. He said:

“We are excited to share Rialto’s expertise in building networks and trading solutions in the regulated securities industry to develop this new venture in partnership with Bittrex.”

Bittrex CEO Bill Shihara noted that it takes a unique blend of advanced technology and financial expertise to develop a digital securities platform that would provide efficiency, reliability, and security to its users.

He added that his company had found the perfect match in Rialto and its CEO Shari Noonan. He said that Rialto had extensive knowledge of the securities market, while Shari’s experiences at Goldman Sachs and at Germany’s Deutsche Bank would be of great significance.

Targetting large investors and institutions

The upcoming trading platform will be open to many of the institutional investors, multinational corporations, and U.S-based regulated broker-dealers.

This group of investors must, however, satisfy the U.S securities requirements of a $200,000 annual income or have a net worth of over $1 million.

The new platform will benefit the user who will want to easily trade virtual tokens against fiat. Rialto has also indicated that it will offer investors issuance advisory as well as provide custody services.

Industry trend: regulating through M&A + partnerships

Many cryptocurrency companies are resorting to partnerships or acquisitions. It is a way of attracting more clients in a market that is becoming both extremely competitive and rigorous in terms of regulations.

The U.S Securities and Exchanges Commission (SEC) has increased its scrutiny and exchanges that offer tokens deemed as securities must register as alternative trading systems before offering their services.

The regulatory crackdown has seen a number of crypto exchanges seek licenses or partner regulated firms in order not to break SEC’s regulations.

In July, Bittrex signed a partnership with UK-based fintech invest.com to launch a new crypto trading platform for European investors.

And in early August, Bittrex teamed up with CataIX to launch a new cryptocurrency exchange in Canada. The new platform is expected to launch its beta version on August 27.

In June, Coinbase also announced it had acquired securities broker-dealers Keystone Capital, Venovate Marketplace, and Digital Wealth LLC.