Markets
Flowdesk’s bet on expanding into New York when the cryptocurrency landscape looked bleak in 2023 is now paying off
Guilhem Chaumont, CEO of market maker Flowdesk, is ready to follow his convictions even when the general outlook may be contrary.
At the time, it was an unconventional move. A few months earlier, CoinDesk published a rare editorial piece, noting that conspiracy theories that the U.S. government was trying to kill cryptocurrencies didn’t seem too far off. The editorial argued that the government was intentionally suppressing the industry through punitive regulatory enforcement actions and a lack of will to create workable rules.
“The philosophy of the company has always been the same. We have a lot of conviction about where the market is going,” Chaumont said in an interview this week. “Building a company, especially in crypto, is always about making contrarian bets and seeing what others haven’t seen. We’re not very sensitive to short-term macro events. That’s why we’ve always been very excited about the U.S. for crypto innovation. It’s a land of innovation and a huge market for everyone.”
Expanding its US footprint in 2023, when the situation looked grim, gave Flowdesk a first-mover advantage when the market recovered.
“We’re now taking a significant market share and our company is in better shape than ever: profitable with a huge increase in volume and revenue,” he said. “Fueled by the ETF approval earlier this year, we started to see more positive news and said, ‘OK, our bet is probably going to pay off.’”
The situation may have improved significantly, but there is still work to be done even though the Financial Innovation and Technology for the 21st Century Act (FIT21) – which was praised by some industry stakeholders as a step in the right direction – goes to the Senate with bipartisan support.
For example, Flowdesk cannot yet compete with its US counterparts; there are still operational limitations in the market.
Another headache is custody. Chaumont argued that the U.S. needs a simplified, globally harmonized regulatory framework for custody, which, if done right, could unlock enormous business potential.
Many problems could be solved with harmonization, and Chaumont points to the European Union’s MiCA regulations as an example where this works well. There are lessons to be learned from the EU approach, he said, which eliminates the need for multiple licenses by individual states. This is the situation that persists in the United States.
“In Europe, you don’t have to get multiple registrations,” he said. “Once you’re registered in one country, you can operate throughout the region.”
A lot has happened in the United States in the past year, and who knows, perhaps such harmonization will be the order of the day when the time comes for Consensus 2025.
“If there hadn’t been these bottlenecks and these uncertainties, we could have grown three times faster, as happened in France,” Chaumont said.