Circle has poached a fintech executive as the Goldman Sachs-backed firm massively overhauls its trading infrastructure

Quick Take

  • Circle has hired an executive from the fintech world.
  • Vishal Gupta, previously of MoneyLion and Goldman Sachs, has joined the firm as head of business development and partnerships. 

Circle, the cryptocurrency exchange operator and trading firm, has poached an executive from the financial-technology world to explore new ways for the company to make money.

Vishal Gupta, formerly VP of business development at MoneyLion, the personal-finance startup, was hired by Circle in recent weeks as head of business development and partnerships, people familiar with the hire told The Block. 

Founded in 2013, Circle is one of the best-funded firms in crypto, counting Wall Street powerhouse Goldman Sachs as one of its main backers. Its over-the-counter trading operation, Circle Trade, facilitates billions of dollars worth of crypto trades per month, according to its website. 

Gupta, according to a source, will leverage the experience he gained in electronic trading at Goldman Sachs to explore new revenue streams across Circle's institutional business lines. Gupta left Goldman in 2011 after 7 years at the firm to join Volant, a trading firm, as head of execution. 

Gupta will explore trade cost analysis, according to a source. TCA, a way to determine the effectiveness of an investor's trading transactions, is a common offering in equity markets, but has yet to become mainstream in crypto. It could move the needle for some traditional firms waiting for Wall Street capabilities to find their way to the volatile crypto markets before they jump in. 

Circle is beefing up OTC

Gupta has joined the firm as it beefs up its over-the-counter trading business to meet the needs of larger investors, such as hedge funds and family offices.

OTC desks like Circle's offer wealthy crypto holders and institutions a way to buy or sell bitcoin without impacting the price on a public exchange venue such as Coinbase or Circle's Poloniex exchange. Unlike trading in US equities, the majority of OTC trades in crypto occur via telephone or Skype, rather than electronically. That's kept some investors out of the market, but Circle hopes electronic upgrades to its trading platform will lure in more large investors. 

"Major institutional investors don't go through a telephone broker. They go through an electronic interface," Circle CEO Jeremy Allaire told CNBC in June. "We're maturing this into a more traditional product; it's much faster and a more flexible way to trade."

Despite the bitcoin bear market, there are signs that institutional interest in the market for digital coins has picked-up, serving as tailwind for the firm in recent months, according to Allaire. He told CNBC Circle saw an increase of new institutional clients by 30% month-over-month

Still, volumes for Poloniex lag behind larger rivals. As per data from CoinMarketCap, the exchange was ranked 39th behind Coinbase and Kraken. And the market for digital currencies has shed more than $500 billion since reaching a peak in January 2018. 

Elsewhere in the crypto world, Coinbase was reportedly on-boarding a $20 billion hedge fund in July, whereas Chicago-based Seed CX is working on bringing a $40 billion fund onto its trading platform, according to a person familiar with the matter. 

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