Nick Chong · 5 hours ago · 3 min read
News › Exclusive › Interview
Former E*TRADE Executive talks crypto trading, new role at Voyager Digital and blockchain predictions for 2020
Stephen Ehrlich is a veteran in the capital markets space. He has worked in the industry for more than 25 years, starting out his career at TIR Securities, an institutional brokerage that was sold to E*TRADE Financial.
Ehrlich was asked to join E*TRADE Financial and spent seven years at the company, ultimately rising to the CEO position. Later, from experience gleamed running E*TRADE, he launched his own firm called Lightspeed Financial in 2006. By 2009 Lightspeed Financial was doing 450,000 trades per day and became the third-largest brokerage in the United States.
Ehrlich eventually left Lightspeed International in 2013, taking a step back from capital markets. It was during this downtime that he met his current co-founders of Voyager Digital, founded in 2017. Voyager Digital is a licensed crypto-asset broker that provides investors with a turnkey solution to trade crypto-assets, that offers zero-commission trading.
In the interview, we discuss Ehrlich’s previous role at E*TRADE, his new role at Voyager Digital, his crypto predictions for 2020 and much more.
What is your professional background and how/when did you get into crypto?
Steve Erlich (SE): I’ve been in capital markets for over 25 years. Early in my career, I worked at TIR Securities, Inc., one of only three global soft dollar brokers when the Soft Dollar Brokerage industry emerged. At Lightspeed Financial, I led the first Broker-Dealer solely focused on active traders and automated trading. As CEO of Tradier, I led an API brokerage before any broker-dealers were utilizing that technology. I’ve been fortunate enough to be at the forefront of many financial revolutions, including as CEO of online trading at E*Trade.
I was introduced to crypto in early 2017 and I quickly realized I needed to be a part of the industry. I saw that in the crypto market, there were similar issues as the early days in the stocks and equities markets like price discrepancies and market inefficiencies. I knew traders deserved a better product and starting Voyager seemed like the obvious next step for me
Tell us about why you decided to start Voyager Digital?
SE: My co-founders and I sat down in 2017 and looked at the competitors in the crypto market. We knew we could build something smarter and more intuitive for customers.
We thought crypto investors deserved the same experience and service that they were accustomed to in the traditional markets, all while honoring crypto’s unique value propositions. We’re proud to say we delivered that with the launch of Voyager.
Where is your team located and why did you choose that jurisdiction?
SE: We’re based in New York with offices in New Jersey and California. We chose New York because it’s the greatest city on earth, its access to top tech and finance talent, and the other locations are based upon important regulatory infrastructure.
What are some of Voyager Digital’s notable achievements or milestones?
SE: It’s been an adventurous 2019 for Voyager! We launched our iOS application in February to a waitlist of over 100k users. Getting our hero product out the gate and in the hands of customers was a major accomplishment, but we’re also extremely proud of taking the company public in Canada and our acquisition of Ethos. Read more below:
- Going Public (VYGR.CN) – Earlier this year, we took our company public, a major milestone in building a trusted crypto solution. Holding ourselves accountable to the regulators of the public markets in Canada (VYGR.CN) ensures we maintain a standard of excellence. As a publicly-traded company, we operate with the transparency we believe the crypto market deserves.
- Voyager & Ethos – Recently, we completed our acquisition of Ethos, a leading Universal Wallet & Blockchain Technology provider. Ethos’ technology bridges multiple blockchain protocols and financial institutions and systems. This union expedites Voyager’s ability to support more coins for trading and blockchain transfers. Additionally, the newly branded Voyager Token (formerly known as the Ethos token) will serve a variety of functions within the Voyager trading ecosystem, particularly in our plans to integrate self-custody into the app.
In your time as CEO of E*trade Professional Trading, what did you learn that you can apply to Voyager Digital?
SE: At E*Trade, I became part of a team tasked with creating a state-of-the-art product that convinced the world to not only trust us with their investments but to trust online trading as a whole. It was a tough sell but with a lot of hard work and some blind trust from early adopters, E*Trade and our competitors were able to obtain customers, assured them that online trading was the future, and a better future at that. Not only did existing customers convert but millions of new investors entered the market for the first time. The birth of online trading in the 1990s caused the percent of individuals trading stocks to increase to 20% from just 5% during the previous decade.
In my opinion, crypto will get even more people around the globe trading and investing. Crypto is a 24-hour market, in which trading and funds are always accessible, and it’s also global and borderless. The same pillars that helped online trading grow, such as transparency, excellent customer service, and accessibility, will also push the crypto market forward. We see a huge opportunity for growth and expansion in this exciting marketplace.
What are the benefits of using Voyager Digital as opposed to other crypto trading platforms?
SE: First and foremost, Voyager is the simplest and fastest place to buy and trade crypto. We’re not an exchange, we’re a broker, so we take a customer-centric approach, and we believe that using and trading crypto should be an easy and seamless experience.
Other trading platforms can be really confusing and complex, getting started requires buying crypto on one platform, transferring to an exchange, with multiple KYC requirements; you can do all of that on Voyager in under 5-minutes.
We also offer interest on Bitcoin and our own native token, The Voyager Token; we will be expanding this offering to other assets in the future. At Voyager, you get the benefits of multiple service providers all in one easy-to-use app.
What can you tell us about the Voyager Digital product roadmap? What upcoming features are you most excited about rolling out?
SE: Next year, we’re looking to expand internationally which is a huge step for us in bringing crypto to the masses. We’re also planning on adding new assets and blockchain transfers, debit cards, and more. Many exciting new developments on the horizon!
What are the biggest challenges of building a crypto trading platform for crypto users?
SE: The crypto market is so new and because of that, it’s sort of the wild west. There is very little regulatory guidance and there’s still a lot of confusion surrounding the technology. For us, a lot of work went into making sure we were following the existing regulation and preparing for a more regulated future.
There’s also a major liquidity issue in the market. We knew from day one that we wanted to be aggressive in the assets that we offered. It was difficult to find reputable custody partners that supported a wide range of crypto assets. By building a Smart Order Router that connected to multiple exchanges and partnering with elite partners, we’ve been able to create a custody and liquidity network unlike any other in the market.
The other challenge is building trust in the crypto market. Many people have been victims of misinformation and shady exchange platforms. We’re trying to teach people the value of cryptocurrencies and blockchain technology and get them comfortable investing with a licensed and secure platform like ours.
What other projects and/or blockchain developments are you most excited about?
SE: We’re big fans of Celsius and RoundlyX, both of which are partners of ours. Celsius’ mission is very much aligned with ours; they believe it’s time to replace the current financial systems with a new model that acts in the best interest of its customers. They offer interest, lending, and loans in crypto.
RoundlyX lets you invest your spare change in crypto and make recurring purchases. You can connect your Voyager account, so all of your spare change is deposited into Voyager in the asset of your choice.
We’re also excited about a few of our traditional equities clients that are now offering crypto to their clients like Market Rebellion, Tiger Trading, Sterling Tech, and Avant Garde Trading. For each of them, their customers we’re asking for access to crypto and they used our technology to make it happen. Nothing makes us happier than giving people new to the market a secure and seamless access point to crypto.
Do you have any blockchain and/or crypto predictions for 2020 and beyond?
SE: We believe that the financial industry is in a transformational phase. Payments, trading, custody, and clearing are all changing because of crypto. Some changes will take place in the short term, but the bigger disruption will probably take more time. We want to be at the forefront – educating consumers and regulators, developing solutions, and leading the way towards a more democratized financial future. Long term, the possibilities of blockchain technology and crypto are endless. We are confident that equities will take form as digital assets, crypto will be used at your corner store, and many companies will look more like decentralized networks. In the meanwhile, the industry has a lot of work to do!
What are the biggest obstacles for the mainstream adoption of crypto?
SE: Firstly, it is the ease of use. If it’s not easy, people just won’t use it. That’s the big problem we’re here to solve. Our goal is to make crypto so easy your grandmother could use it.
Secondly, as I mentioned previously, there’s a major trust issue and learning curve when it comes to crypto. Lots of people have been victims of misinformation and shady exchange platforms. We’re trying to build that trust by adhering to regulations, obtaining the proper licenses, going public on the Canadian Securities Exchange (CSE), and educating people on the value of cryptocurrencies and blockchain technology.
What is your most controversial opinion relating to blockchain and/or cryptocurrency?
SE: Great question. I’d say that there is a lot of infrastructure development work needed in crypto and blockchain before it goes mainstream. Everyone wants the price to go up, but the long-term viability of this industry is dependent on blockchain platforms and protocols being developed and tested and made scalable and efficient.
Crypto has to deliver a competitive advantage to the world, giving people and companies a reason to use it over traditional fiat or funding alternatives. This is happening, but it needs time, and we’re well-positioned as a leader in this initiative.
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