Four of the largest crypto-native trading firms now hold SEC-registered broker-dealer licenses in the United States. Wintermute USA LLC completed its registration with the SEC and FINRA on August 6, 2026, joining GSR Securities (approved June 2026), Ripple Prime (acquired October 2025 for $1.25 b...
"Digital assets and traditional finance will continue to develop in parallel, intersect in new ways, and ultimately integrate more deeply." — Evgeny Gaevoy, Founder and CEO, Wintermute
Four of the largest crypto-native trading firms now hold SEC-registered broker-dealer licenses in the United States. Wintermute USA LLC completed its registration with the SEC and FINRA on August 6, 2026, joining GSR Securities (approved June 2026), Ripple Prime (acquired October 2025 for $1.25 billion), and Crypto.com's Watchdog Capital subsidiary (acquired October 2024). Separately, Paxos secured SEC clearing agency registration on May 28, 2026 — the first blockchain-native firm to do so.
The pattern is unambiguous: crypto market makers and exchanges are obtaining the same regulatory credentials as established Wall Street participants. These are not token launches or protocol upgrades. They are applications to the SEC and FINRA — the same bodies that regulate Citadel Securities, Jane Street, and Virtu Financial. The economic logic centers on capturing fee revenue from crypto ETF authorized participant roles, tokenized securities settlement, and institutional prime brokerage — markets where regulatory licensing is the binding constraint.
This report examines the five major crypto-to-TradFi license acquisitions completed between October 2024 and August 2026, assesses their strategic rationale, and evaluates what this convergence means for the value distribution between crypto-native and traditional financial intermediaries.
| Date | Firm | License Type | Method | Estimated Cost | |------|------|-------------|--------|---------------| | Oct 2024 | Crypto.com (Watchdog Capital) | SEC broker-dealer, FINRA member | Acquisition | Undisclosed | | Oct 2025 | Ripple (Hidden Road → Ripple Prime) | Multi-asset prime broker, FINRA member | $1.25B acquisition | $1.25 billion | | May 2026 | Paxos (PSSC) | SEC clearing agency (Section 17A) | 7-year application process | Undisclosed | | Jun 2026 | GSR (Equilibrium Capital → GSR Securities) | SEC broker-dealer, FINRA member | Acquisition | Undisclosed | | Aug 2026 | Wintermute (Wintermute USA LLC) | SEC broker-dealer, FINRA member | Built from scratch | Undisclosed |
Five transactions in 22 months. The approach varied — Ripple spent $1.25 billion on an operating prime broker, GSR and Crypto.com acquired shell or small broker-dealers, Wintermute built its entity organically, and Paxos spent seven years securing clearing agency status from the SEC. The destination was the same: regulated access to U.S. securities markets.
Wintermute's registration, announced August 6, 2026, is scoped to proprietary trading. Wintermute USA LLC can act as principal in U.S. equities and equity options, self-clear digital asset securities transactions, and serve as an Authorized Participant (AP) for exchange-traded products, including crypto ETFs.
The firm's global operations generate more than $10 billion in average daily trading volume across 60+ centralized and decentralized exchanges. It already supplies liquidity for Fidelity's Wise Origin Bitcoin Fund and is a whitelisted market maker for BlackRock's BUIDL tokenized money-market fund via UniswapX.
CEO Evgeny Gaevoy outlined a phased expansion plan spanning three to five years:
The competitive target is explicit. Wintermute aims to rival Jump Trading, Jane Street Capital, and Citadel Securities within five years. Whether a crypto-native firm can replicate the risk management infrastructure and regulatory relationships that incumbents built over decades remains an open question. However, the $10 billion daily volume provides a starting footprint that few new entrants can match.
Wintermute has not yet disclosed DTC participation agreements or distributor arrangements — standard requirements before formal AP operations can begin for ETF creation and redemption.
Ripple's acquisition of Hidden Road, announced at Paris Blockchain Week in April 2025, was the largest deal in digital asset history at the time, surpassing Stripe's $1.1 billion acquisition of stablecoin platform Bridge.
Hidden Road, founded in 2018, was already clearing more than $3 trillion annually across 300+ institutional clients in FX, derivatives, swaps, fixed income, and digital assets. Ripple closed the acquisition in October 2025 and rebranded the business as Ripple Prime.
The one-year results, according to reporting by Yahoo Finance:
The Ripple deal demonstrates that crypto firms are not merely collecting licenses for optionality. Ripple is running an operating multi-asset prime brokerage at institutional scale, with $3 trillion in annual clearing volume serving as the revenue base.
GSR Securities LLC. GSR, founded in 2013 as a crypto market maker, received FINRA approval on June 9, 2026 to complete its acquisition of Equilibrium Capital Services, a Portland-based FINRA-registered broker-dealer. The entity was renamed GSR Securities. The acquisition positions GSR to offer securities-related services, capital markets advisory, and tokenization-linked transactions alongside its existing crypto liquidity business. GSR first announced plans to acquire the broker-dealer in October 2025.
Crypto.com. In October 2024, Crypto.com acquired Watchdog Capital LLC, a Portsmouth, New Hampshire-based SEC-registered broker-dealer and FINRA/SIPC member. The acquisition allows Crypto.com to offer U.S. equities and equity options trading to eligible users, adding traditional securities to its existing crypto exchange. CEO Kris Marszalek stated the move was aimed at "integrating traditional financial tools with digital financial capabilities." Watchdog Capital was founded by Bruce Fenton, a long-time digital asset advocate.
Paxos Securities Settlement Company. On May 28, 2026, the SEC granted Paxos PSSC registration as a clearing agency under Section 17A of the Securities Exchange Act of 1934 — the first blockchain-native firm to receive such approval. The SEC issued a temporary exemptive order permitting Paxos to operate a blockchain-based central securities depository and settlement system for a limited category of securities for up to 18 months. The registration followed seven years of engagement with the SEC, beginning with a No-Action Letter in 2019 and a settlement pilot with major financial institutions starting in February 2020. Paxos demonstrated daily clearing and settlement of U.S. equities on-chain during the pilot period.
The Paxos registration is architecturally distinct from the broker-dealer licenses. While Wintermute, GSR, Ripple, and Crypto.com operate at the trading and intermediation layer, Paxos now operates at the settlement infrastructure layer — the plumbing beneath the trades.
Two regulatory changes created the conditions for this convergence.
May 15, 2025: SEC/FINRA Joint Statement Withdrawal. The SEC and FINRA withdrew their July 2019 joint staff statement that had effectively warned broker-dealers against custodying digital asset securities. The original statement raised concerns about private key management, fraud risk, and compliance with the Customer Protection Rule. Its withdrawal removed the regulatory overhang that had deterred broker-dealers from engaging with digital assets for six years.
April 13, 2026: SEC Staff Statement on DeFi Interfaces. The SEC Division of Trading and Markets issued guidance clarifying broker-dealer registration requirements for persons operating cryptoasset securities interfaces. The statement effectively carved out a registration exception for user interfaces, providing regulatory certainty that had been absent since the SEC began enforcement actions against DeFi protocols.
July 2025: In-Kind ETF Creation/Redemption Approval. The SEC approved in-kind creation and redemption mechanisms for Bitcoin and Ethereum ETPs. This expanded the economic value of authorized participant infrastructure — precisely the capability that Wintermute's broker-dealer registration enables.
These were not deregulatory measures in the broad sense. They were targeted clarifications that reduced specific compliance risks for crypto firms seeking traditional licenses. The effect was to lower the regulatory cost of crossing the boundary between crypto and securities markets.
The convergence is driven by fee capture across three revenue streams:
1. ETF Authorized Participant Fees. APs earn the spread between ETF share prices and underlying asset values during creation and redemption. For crypto ETFs, this spread can be wider than for traditional equity ETFs due to cross-market liquidity fragmentation and 24/7 crypto trading versus exchange-hours-only ETF trading. Currently, Jane Street Capital and Virtu Americas dominate AP roles for crypto ETFs. Wintermute's registration positions it to compete for these roles.
2. Tokenized Securities Settlement. As traditional securities move toward blockchain-based settlement — a process Paxos is now authorized to facilitate — firms that operate across both crypto and traditional rails capture settlement and clearing fees. The DTCC processes approximately $114 trillion in securities annually. Even a small share of that settlement volume migrating to blockchain infrastructure represents significant fee revenue.
3. Prime Brokerage. Ripple Prime demonstrates the unit economics: $3 trillion in annual clearing volume, profitability achieved within one year, and a BBB credit rating enabling lower borrowing costs. Prime brokerage bundles lending, clearing, custody, and execution — each a separate fee layer.
The economic question is not whether crypto firms can obtain licenses. They already have. The question is whether crypto-native firms, built on 24/7 global liquidity provision and DeFi market making, can structurally undercut incumbent intermediaries on cost. Wintermute's technology infrastructure was built for sub-second execution across fragmented on-chain and off-chain venues. That operational architecture may translate into lower marginal costs for ETF market making and securities settlement — or it may prove insufficient against the regulatory expertise and institutional relationships that incumbents have built over decades.
The boundary between crypto-native firms and regulated securities intermediaries is collapsing, measured not in protocol launches but in SEC filings. The five license acquisitions documented here represent a combined investment exceeding $2 billion (Ripple's $1.25 billion acquisition plus $1 billion in post-acquisition capital alone) and collectively position crypto firms across every layer of U.S. securities infrastructure — from trading to clearing to settlement.
The strategic logic is straightforward: as tokenized securities, crypto ETFs, and blockchain-based settlement grow, the firms that hold both crypto-native technology capabilities and traditional regulatory licenses will control the intermediation layer where fee revenue concentrates. The incumbents — Jane Street, Citadel Securities, Virtu — built their positions over decades. Whether Wintermute's five-year plan to match them is achievable remains unproven. What is no longer speculative is the direction of capital flow: crypto firms are buying their way onto Wall Street's regulatory rails, not waiting for Wall Street to come to them.