Tower Research Capital doubles down on crypto market making amid market recovery

Tower Research Capital, one of three “VIP” clients named in the 2023 lawsuit against Binance by the U.S. Commodity Futures Trading Commission, is ramping up its crypto market-making efforts.

Tower Research Capital, one of three “VIP” clients named in the lawsuit against Binance by the U.S. CFTC in 2023, has increased its capital allocation to its crypto trading book and upgraded its infrastructure to take on a larger role in market making on global crypto exchanges, people familiar with the matter told Bloomberg.

At the heart of this renewed push is Limestone Trading, which has now become the lead vehicle for Tower’s market-making activities in the digital asset space. It also does arbitrage and spread trading across major crypto exchanges globally.

This development is particularly significant considering Tower’s previous scaling back of its crypto activities in response to the market turmoil that followed the collapse of FTX and Alameda Research in 2022.

However, with the market stabilizing and the growing political support for cryptocurrencies, Tower is now capitalizing on the recovery. Its rival Citadel Securities is also plotting jumping back into crypto trading after Trump’s embrace of the industry.

The growing institutional interest in digital assets is also evident in the mounting ETF applications, which the U.S. Securities and Exchange Commission is struggling to process, resulting in multiple delays. Despite this, the chance of approval for most of these ETFs is notably high, according to Bloomberg analysts.