Wall Street Journal is reporting a partnership between Atlas ATS and the National Stock Exchange in a bid to regulate its digital currency trading activities.
According to its website, Atlas ATS is “a secure, state-of-the-art exchange platform built by Wall Street veterans for transacting digital currencies”. They have reportedly taken a recent focus on high frequency and automated trading. They partnered with Perseus Telecom, which offers low-latency, high bandwidth communications technology geared toward such trading.
The National Stock Exchange facilitates securities trading and is recognized by the Securities and Exchange Commission (SEC) as a self-regulatory organization (SRO). It facilitates but 0.2% of daily trading volumes in the U.S., which are dominated by the New York Stock Exchange and Nasdaq. The exchange was founded in 1885 in Cincinnati and went all-electronic in 1976. For them, it is hoped that the deal will help business pick up.
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It has been speculated that such regulation will help them and others following suit to skirt the cumbersome process of obtaining money transfer licenses in all 50 states as required by FinCEN.
Atlas said that it would base its rule book upon SEC-approved rules used by U.S. Stock and Option exchanges. It would also have to adhere to other measures such as record book requirements and accounts segregation. According to Atlas CEO Shawn Sloves, the exchange would become the first to be regulated by a “quasi-government entity.”
If the deal goes ahead, it can be the closest Bitcoin or its trading has ever gotten to the realm of regulation. By making inroads into an already regulated body, it would be taking a backdoor approach to attaining this elusive milestone. There have previously been numerous developments in the U.S. and elsewhere hinting in the direction of regulation for digital currencies, such as the registration of Winklevoss Bitcoin Trust with the SEC. However, there has been little concrete progress thus far.
It will be interesting to see the SEC’s reaction and if they would potentially strip their SRO recognition from an exchange engaging in products it does not yet recognize. Thus far, the SEC has not commented on the deal.