Former Goldman Electronic Trading Head Sees Parallels in Crypto

(Bloomberg) -- Greg Tusar, the former global head of electronic trading at Goldman Sachs Group Inc., is excited about digital assets despite the horrific year for cryptocurrencies.

“It feels like being at the early days of trading equities electronically,” said Tusar, who serves as chief technology officer and is a co-founder of Tagomi Holdings. “It’s early stage, there’s a lot of opportunity to build great businesses and have impact.”

Tagomi, which bills itself as the first live electronic brokerage offering prime services, has begun executing client trades. Tusar is working alongside co-founders Jennifer Campbell, who is serving as chief executive officer, and Marc Bhargava, the company’s president.

The platform combines liquidity across different exchanges and offers more trade reporting and transparency to customers such as hedge funds and high net-worth individuals, the trio said in an interview.

Crypto investors are currently saddled with many difficulties, including concerns over custody, struggles engaging with large exchanges and executing large orders, among other things, said Tusar, adding that there isn’t anyone who can help clients implement these strategies from beginning to end. Investors who want to place orders of $10 million for Bitcoin, for example, might be limited if no exchange is able to handle the order.

“The current environment is challenging, for sure, but we think there’s a lot of longer-term demand for digital assets and helping clients understand the transformative impact of crypto and blockchain," he said.

Tusar spent 13 years at Goldman, leaving in 2013 after serving as global head of electronic trading. He spent years representing Goldman at industry conferences and commenting publicly about regulatory proposals involving equity market structure and was named partner in 2008.

More recently, he’s worked as head of client market making and execution at New York-based KCG Holdings Inc. and spent time as chief executive officer of Greywolf Consulting, according to his LinkedIn profile.

The launch of trading by Tagomi Holdings comes amid a meltdown in the cryptocurrency universe that has seen the largest tokens shed billions in market value after surging in 2017. Bitcoin, which traded near $20,000 just a year ago, has dropped more than 75 percent to around $3,200 Monday. And some analysts are predicting it is likely to continue its downward trend and could fall as low as $1,500.

Former Goldman Electronic Trading Head Sees Parallels in Crypto

Cryptocurrencies have come under pressure from U.S. regulators who have increasingly cracked down on the space, with the Securities and Exchange Commission refusing to back a Bitcoin exchange-traded fund amid lingering price manipulation and surveillance concerns. The agency also fined two companies that hadn’t registered their initial coin offerings as securities.

But as prices have dropped, volatility has fallen and the company’s suite of tools becomes more important, said Campbell. “In periods of lower volatility, tools like those Tagomi provides, which reduce transaction costs, will become far more important.”

Tagomi’s investors generally have a long-term view when it comes to digital assets and cryptocurrencies, said Tusar. Backers include Peter Thiel’s venture-capital firm, Founders Fund, along with the Collaborative Fund, SV Angel, Brainchild and Digital Currency Group.

“We began building in March and began testing our platform a number of months ago,” Tusar said. “We’re launching now because we finished building the platform and want to go out and engage clients. The people we’re engaging so far are still interested and engaged because they see what this technology can do over the long-term."

Digital assets are in their early innings, Tusar said. "In taking the long view, I really believe that this is a transformative technology, that we’re still in the early stages."

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