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Automated trader DRW eyes crypto hires in Asia, expands Singapore office

[SINGAPORE] DRW Holdings LLC, the automated trading firm founded by Don Wilson, plans to add staff at its cryptocurrency unit in Asia and is considering opening an office in mainland China, as it expands into new markets.

The Chicago-based firm, which opened its sole Asian office in Singapore in March 2015, last year hired several locally-based executives from rivals and started a regional cryptocurrency trading desk. DRW plans to boost its Singapore staff to 100 from about 40 within five years and expects to soon add employees at its Cumberland Mining cryptocurrency division.

"There are some natural countries that would require the need for a presence and we're considering that: China, India and Hong Kong would come to mind," Brook Teeter, head of Asia, said in an interview.

DRW's plans come as trading firms struggle with low volatility and volume after years of monetary easing by central banks. The tougher conditions have led to consolidation in an industry that boomed in the aftermath of the financial crisis.

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In the US, Virtu Financial Inc, which bought KCG Holdings, posted its first net loss as a public company in November. DRW, founded by Mr Wilson as a one-man shop in 1992 and which now has 800 employees, said in August it had agreed to buy rival RGM Advisors.

Mr Teeter's office trades assets from fixed income to equities across Asia. The region's "evolving" capital markets and regulatory environment offer opportunities, he said. The Singapore location's revenue rose 44 per cent to S$30.4 million in 2016, according to the latest publicly available figures.

"The diversification we have gets us through the tough times," said Mr Teeter, who was hired from Tower Research Capital LLC at the end of 2016.

As high-speed firms have struggled in established markets, they've turned to the new frontier of cryptocurrencies. DRW started trading bitcoin in 2014, ahead of most of its rivals, and its Cumberland arm started its Singapore team in November.

Asia has seen robust demand, fueling a 40 per cent premium in bitcoin prices in South Korea even as local authorities raised alarms. A digital coin from China called NEO has crossed US$12 billion in market value, making it the 12th most valuable cryptocurrency despite hailing from a country that has one of the harshest crackdowns on crypto-speculation.

"Asia is incredibly important to the cryptocurrency ecosystem," said DRW spokeswoman Jessica Iverson. Cumberland has about 20 people around the world and expects to add staff "in the near term", she said. Cumberland quotes prices for digital currencies including bitcoin and ethereum and also mines zcash, according to Ms Iverson.

DRW isn't the only firm hiring and expanding in Asia. Hudson River Trading is looking for a head of trading operations in China, according to its website. Flow Traders said earlier this week it's opening a Hong Kong office.

"I'm still bullish," said Mr Teeter. "Volatility will come back - there's just too many things going on in the world."

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