Uphold is a multi-asset digital money platform offering financial services globally.
Founded in 2015, the platform supports over 250 traditional and cryptocurrencies, along with commodities, facilitating seamless foreign exchange and cross-border remittance. Uphold’s unique “Anything-to-Anything” trading allows users to trade directly between different asset classes.
Uphold has powered over $40 billion in transactions across 184+ countries. The platform's offerings include a digital wallet, trading capabilities, and payment solutions for both individuals and businesses.
Objective
Uphold aimed to integrate registered broker-dealer services to enable a seamless customer experience between crypto and equities trading.
The goal was to allow users to trade between cryptocurrencies and fractional shares of publicly traded companies, enhancing the platform’s multi-asset trading capabilities.
Background
Uphold had already established a strong reputation as a leading traditional and crypto trading app, attracting millions of users worldwide with its user-friendly interface and diverse asset offerings.
However, the company aimed to expand its services by integrating equities trading with its existing crypto trading platform. This ambitious vision sought to provide users with a seamless way to use the value stored in their crypto wallets to purchase fractional shares of publicly traded companies.
Uphold’s goal was to create “a future where people and businesses around the world have access to safe, transparent, fair and affordable financial services.”
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Challenges
Integrating equities trading with cryptocurrency wallets presented significant regulatory complexities and operational challenges. The process required Uphold to navigate stringent regulatory requirements and adapt its middle- and back-office systems to manage the unique demands of trading between these asset classes.
Balancing regulatory compliance with maintaining a user-friendly experience was a key challenge in this ambitious integration.
InnReg's Solution
InnReg provided comprehensive support to Uphold to address the regulatory and operational challenges of integrating crypto and equities trading:
Guided through regulatory requirements:
We assisted Uphold in navigating the complex regulatory landscape involved in acquiring a broker-dealer, necessary for settling fractional buy- and sell-trades originating from users’ crypto wallets.Transitioned broker-dealer structure:
Advised on transitioning the acquired broker-dealer from a fully disclosed to an omnibus structure, allowing trades to be managed within a proprietary set of digital books and records under the broker's name.Secured regulatory approval:
Provided critical input and persisted through several rounds of inquiry to obtain FINRA approval for Uphold to provide these new services.
Client Results
On March 31, 2021, Uphold announced that it had received regulatory approval to purchase JNK Securities, a US broker-dealer. This milestone made Uphold one of the first cryptocurrency firms to own a broker-dealer approved to offer equities.
The news generated significant buzz in the industry, with extensive coverage in cryptocurrency, fintech, and regulatory press. As a result, Uphold’s search traffic increased by approximately 1,000%.
