A new, Toronto-based crypto exchange will allow users to trade in bitcoin, ether and litecoin (with potential expanded offerings in the near future) for no fees.
The exchange, Newton, is partnered with DV Trading, a regulated proprietary trading firm with over a decade of experience trading stocks, bonds, derivatives and, more recently, cryptocurrency for institutional customers.
Newton CEO Dustin Walper told Bitcoin Magazine what some critics have already been saying, that bitcoin mass adoption will only come when trading is made easier and cheaper.
And Walper thinks it’s time for the adults to step into the Canadian exchange market noting, “Cryptocurrency is growing up as an asset class, and professional management is a must.”
“We felt that Canadians were poorly-served by incumbents, and that there was room for an aggressively low-cost player that doesn’t compromise on UX,” he said. “As a Canadian I also thought it was crucial to increasing adoption and, eventually, lessening the insane grip Canada’s banking oligopoly holds on the payments industry. It’s really, really anti-competitive.”
Is a Fee-Free Crypto Exchange Possible?
Walper told us Newton can offer no-fees trading because the exchange will be making a small profit from the “bid-ask spread,” the difference between buying and selling prices.
“Lower fees and tighter spreads are better for consumers, and a prerequisite to mainstream adoption of cryptocurrency for payments,” he said. “Moving money between fiat and cryptocurrency needs to be low-cost and painless if it’s ever going to be ubiquitous … Even though our spreads are extremely tight, particularly for Canada, we act as a market-maker … and with a firm like DV Trading backing us, it’s an extremely sophisticated market-making operation that allows us to make money at prices that most other companies can’t.”
Newton will be publishing buy and sell prices on its website.
How Secure Is Newton?
After QuadrigaCX, the Canadian crypto community could be forgiven for being skeptical about Newton and its promise of a new feeless, secure, fast and convenient cryptocurrency trading platform.
As such, Walper recognizes the importance of air-tight security in today’s crypto marketplace, calling it “a huge part of our strategy.”
The exchange will keep “the vast majority” of assets in cold storage off-site with no access to the internet. And all keys will be backed up in multiple copies to prevent accidental loss.
Access to clients bank accounts will be facilitated by Plaid, an identity and verification app.
“Transferring funds from your bank account to Newton is as simple as entering an amount into our app and tapping ‘Add funds.’ Plaid makes this sort of experience possible,” said Walper.
Getting Up to Speed With Government Regulations
Calling Canada’s new AML regulations “timely” and “necessary,” Newton has taken the first step, registering the company with the Financial Transactions and Reports Analysis Centre of Canada.
“We’ll be making a big announcement soon about how we’re handling custody of our assets — I can’t say much yet, but if you’re thinking ‘third-party,’ ‘audited’ and ‘insured,’ you’d be on the right track,” Walper told Bitcoin Magazine. “Canada is a great place to do business with tons of technical talent on offer. We’re a top 10 economy globally, so it’s not a bad choice for our first market and an ideal base for launching global operations in the near future.”
Fittingly, Walper concluded his expectations for Newton and the needs it will fill with a hockey metaphor.“As Gretzky famously said, skate to where the puck is going,” Walper recalled. “In this case, as with FX or stock brokerages, the puck is going towards lower fees and tighter spreads. We’ve laced up our CCM JetSpeeds and we’re holding on to the Zamboni.”
Jessie Willms is a planet earth based former government and political researcher and communications officer helping to document the FinTech revolution and its impact on traditional institutions and governments. You can follow Jessie on Twitter at @WILLMS_.