(Bloomberg) -- A new decentralized cryptocurrency market co-founded by a veteran of automated trading firm Virtu Financial Inc. handled more than $1 million of transactions on Thursday.
Michael Oved’s company, AirSwap, which began operations Wednesday, probably feels like a contradiction to many on Wall Street: A market with no central place where buyers and sellers gather. Instead, bulletin boards on the company’s website and smart contracts on the Ethereum blockchain let AirSwap users find each other anywhere in the world and trade peer-to-peer, their identities masked.
The idea goes to the heart of what many blockchain supporters want: eliminating middlemen in industries from finance to real estate and health care. It also makes digital currencies immune to government crackdowns on cryptocurrencies, such as China’s attempt to close markets within its borders.
The company “puts the three main components of trade -- execution, settlement and custody -- in the hands of users and computer code rather than middlemen,” Oved said in an emailed statement. “AirSwap never touches funds or matches orders.”
AirSwap isn’t the first decentralized trading platform, but its founder’s resume makes this venture worthy of attention. He helped New York-based Virtu become the most consistently profitable market maker in the history of electronic trading. He led its Asian expansion, was promoted to partner in 2014, and ran the North American, South American and European cross-border trading desks. Virtu gained fame for only losing money on a single day from 2009 to 2014 as it matched buyers and sellers in stocks, bonds, futures and currencies.
AirSwap users find each other on bulletin boards, where people post what they’re willing to trade. AirSwap doesn’t decide what tokens can be bought or sold. Currently, 24 are being traded on the platform, including EOS and Gnosis, according to its website.
Oved said market makers on the platform are required to own AirSwap’s AST token, which was sold in a $36 million initial coin offering in October. The firm has attracted some well-known advisers, including fund manager Michael Novogratz and Joe Lubin, a co-founder of the Ethereum blockchain.
“AirSwap is forming a key foundational component in the blockchain ecosystem,” Lubin said in the statement.
©2018 Bloomberg L.P.