Voyager: A Next Generation Brokerage

Why cryptocurrency brokerage is different

Hamlin Lovell
Originally published in the October 2019 issue

Institutional investors such as pension funds are investing in cryptocurrencies and blockchain related enterprises – and so too are millions of smaller investors, with the younger generation most enthused about digital currencies. Their perceived transparency and democracy are two qualities that appeal to Millennials. Multiple surveys suggest that Millennials rank cryptocurrencies more highly than many conventional asset classes. Although the yellow metal, gold, is rallying strongly in 2019, 90% of Millennials prefer “digital gold” in the form of cryptocurrencies, according to the ETF store. A March 2019 eToro survey found that 43% of Millennials trust crypto exchanges over the stock market, while 71% of them would invest in cryptocurrencies. An Edelman study found 25% of Millennials aged between 24 and 38, earning at least USD 50,000 and with at least USD 100,000 of assets, are holding cryptocurrencies. Another report suggested that more Millennials may have an account with Coinbase than with traditional equity brokerages in the US. 

A growing number of traditional brokers now offer access to cryptocurrencies, but few brokers are exclusively dedicated to crypto in the way that Voyager Digital LLC. (a subsidiary of Publicly traded Voyager Digital (Canada) Ltd – the only publicly traded pure play crypto broker (VYGR on the Canadian Securities Exchange) – is. Stephen Ehrlich, CEO and co-founder of Voyager said, “We look at Voyager as the financial services firm of the future and Voyager is building infrastructure that is completely different from the equities or options world, where I spent 20 years. Ehrlich continued, the only similarity to the equities market is the fact that the market structure looks like the equity and options markets of the 1990s, where there were multiple markets with no NBBO (National Best Bid and Offer) rules enforcing best execution”. Voyager believes that Crypto traders need a broker specifically dedicated to the crypto space. One of the major differences between the Crypto market and the Equities markets is that the Equities markets trade to two decimal places whereas cryptos can trade to ten or more. Additionally, Equities settle in two days whereas cryptos settle instantly. Voyager is committed to the best possible customer service and we are beta-testing new offerings including investment and savings accounts, loan products, and margin trading”, says Ehrlich. 


A March 2019 eToro survey found that 43% of Millennials trust crypto exchanges over the stock market.

Ehrlich brings with him strong capital markets experience from founding low latency, direct market access (DMA) retail broker, Lightspeed Financial, which became the third largest online broker in the US. Prior to Lightspeed, Ehrlich built up the active trading division of ETRADE, ETRADE Professional which he renamed Lightspeed Financial when he bought the firm in a management buyout in 2006.

Earlier in his career, he was also Chief Financial Officer and Chief Compliance Officer of TIR Securities, a leading Institutional broker which was acquired by E*TRADE in 1999. The other members of the leadership team of Voyager also have remarkable expertise. Voyager co-founder, Oscar Salazar, was the co-founder of Uber, where he was Architect and Chief Technology Officer, building up the first electronic cab-hailing service, which is viewed as a great user experience. Voyager Chairman, Philip Eytan, was an early investor in Uber, developed a digital healthcare company, Pager for obtaining medical services, and invested in cybersecurity group Socure. Voyager Chief Technology Officer, Serge Kreiker, helped grow Bloomberg technology into one of the biggest data companies as a lead in their trading systems group, also co-founded online broker, Kapitall, and broker infrastructure and investing API platform,,: two companies that President and Director, Gaspard de Dreuzy, was also involved with; ( is also backed by technology entrepreneur, Paypal and Palantir founder, Peter Thiel). In September 2019, another experienced crypto investor – Enzo Villani’s Thrust Capital – participated in a private placement that raised capital for Voyager, which initially listed on the Toronto Venture Exchange and is now listed on the Canadian Securities Exchange. Since 2006, Villani has completed over $500 million in acquisitions focused on the investor relations, corporate communications, financial technology, media, and trading exchange industries. “For our team, the sum of the parts is far greater than the individual constituents, and we rely on each other to bring the best value proposition to the consumer”, sums up Ehrlich. 

Commission-free agency broking and best execution

Ehrlich’s previous two companies, E*Trade and Lightspeed, were agency brokers, as is Voyager, which therefore just acts as a matchmaker, and is not holding any proprietary inventory of long or short positions. The focus is on providing clients with best execution and Voyager’s business model is geared to growing volumes of crypto trading: the key revenue source is currently a bid/offer spread when executing client trades as Voyager obtains best execution from the rather fragmented crypto marketplace of exchanges, OTC venues and other market makers. Voyager is not offering Direct Market Access (DMA), but rather is using its smart order router (Best Execution Dynamic Smart Crypto Order Routing Technology), which is updated regularly, to find the best execution and aggregate liquidity from over 10 venues. “We select the venues based on exhaustive research including volumes, APIs, and ease of sending and cancelling orders”, says Ehrlich. There is some debate over how much reported volume is genuine. All venues have potential for some hidden flow and this is investigated. The concept of best execution contains several facets including price, volume, liquidity and speed. Orders typically take no more than two seconds; there is instant settlement and coins are moved into “cold storage” which all mitigate counterparty risk. Ehrlich feels confident in declaring that, “Voyager offers the deepest liquidity, based on our research and testing”. Many clients would appear to agree: Voyager is gathering momentum, attracting more clients who are trading more often and in larger amounts. 

There are no commissions per se, but withdrawal fees do apply to cryptocurrencies as there are network costs – a processing and mining fee – even if no crypto units are being created or redeemed (some crypto brokers do not even allow withdrawals of crypto). Voyager may also start charging fees for live trading from self-custody accounts, with a roll out of this anticipated in early 2020. Reduced fees are offered if Voyager’s native dynamic utility token can be used for payment.

Compliance, “custody” and security

In common with traditional brokers and some crypto exchanges, Voyager is registered with the Financial Crimes Enforcement Network (FinCen) as a Money Services Business (MSB) and as such has to carry out AML and KYC checks – for “on ramps” via direct deposits of crypto or swift conversion of fiat into crypto. These checks are expedited by the team’s IT acumen: “they are automated through the use of APIs that build on our prior expertise in brokerage. A third party also carries out an audit trail tracing the history of crypto deposits. All of this typically takes 90 seconds so long as manual intervention is not required. The proprietary process requires a US social security number,” says Ehrlich. 

“Custody” is a rapidly evolving area in the crypto world where there have been well known cyber heists. Clearly, “custody” is conceptually different for bearer assets, and also distinguished by ownership that is defined by a code rather than a physical certificate. Voyager has selected the Ledger Vault, Bitgo, and Itbit as its custodial options which Ehrlich describes as “best in class”. This is a multi-authorization cryptocurrency wallet management solution, which uses technology from another Voyager company – Ethos (the Ethos token has recently been rebranded as the Voyager token). The Ethos Bedrock enterprise blockchain application API network is used to move crypto back and forth between agents and wallets. The underlying holdings are diversified across a number of custodians. Customer cash is in a For-Benefit-Of (FBO) account, segregated from Voyager’s corporate assets, and this is shown on Voyager’s balance sheet, in its quarterly financial reports as a public company.

“There are various cybersecurity safeguards which cannot be detailed to maintain their integrity, and a solution for hot storage will soon be announced”, says Ehrlich. Customers can alternatively opt for self-custody, which is of course one of the big attractions of cryptocurrencies for those who distrust the traditional financial system. Customers cannot currently avail of other developing custody solutions such as those offered by Coinbase custody; Fidelity Digital Assets, Paxos Trust Company, LLC and Gemini Trust Company, LLC, but in principle, Ehrlich believes that, “the Bedrock infrastructure easily facilitate moves between these and other custodians”.

A growing investment universe 

Voyager offers trading on 28 coins as of October 2019 and expects to have about 35 by year end 2019. The coins offered are selected based on criteria including their liquidity, security, regulatory framework, and with advice from external legal counsel and other experts. Voyager only carries out secondary market trading of cryptos and does not do ICOs. The priority for additions now is stablecoins, of which Voyager is adding various stablecoins including but not limited to, Paxos Standard (PAX), Dai (DAI), and Gemini Dollar (GUSD). Voyager laos provides live news feeds on the coins it supports.

Brokerage enhancements 

Service diversification will later include solutions for payments and remittances at competitive costs, which has potential to disintermediate banks and credit card companies and reduce frictional transaction costs for workers and retailers. Ehrlich has confidence that: “Voyager will have the bandwidth to handle significant volumes of payments not least because of our history of developing technology: Lightspeed was the only broker that did not go down during the flash crash”.

Voyager’s future offering plans to roll out services include: offering interest-bearing crypto accounts (some brokers are already offering interest as high as 9%); margin and leverage trading (some crypto brokers are offering leverage multiples as high as 1000:1); the ability to go short and robo-advisory or digital advisory. Interest could be financed partly by strategic partners who are loaning out the coins. The benefits of the income are then shared with clients. To this end, Voyager is updating client agreements so that it has permission to re-use the assets in a manner that might be viewed as analogous to the way prime brokers “rehypothecate”.

Bitcoin futures listed on the CME Group, Intercontinental Exchange, or elsewhere could be added in response to retail client demand; Ehrlich believes that the demand has so far come mainly from institutions. He does not know whether or not the SEC will eventually approve a crypto ETF, but Voyager might at some stage offer ETF trading; Voyager has acquired a FINRA-regulated broker dealer and could contemplate other acquisitions. “We could consider anything and everything that could bring customers more depth of liquidity, and more information to let them make more informed decisions. If it makes sense in terms of economics, culture and due diligence, we may do it. My previous firm made eight acquisitions in eight years”, says Ehrlich. Voyager has formed a strategic partnership with Sterling Trading Technology (STT) so its clients can make use of Voyager’s execution capabilities. STT’s technology touches 5% of US equity volumes and is used in 30 countries.

Geographic and app coverage 

Voyager is licensed in 49 US states and is actively talking to regulators in order to seek a New York Bitlicense. International expansion will start in Canada and then move to the rest of the world.

The Voyager App is currently available through the Apple iOS system. The Android application is being rolled out soon. No decision has been made on desktop applications as Ehrlich likes the idea of staying mobile.


“We are in the first innings of the game now. More patience and education should get people really engaged. Everyone should have some exposure to cryptocurrencies – it could be 0.5% or 1% for larger institutions, and maybe more. People are losing trust in central banks and moving towards a decentralized, purely democratic type of money. Negative interest rates are forcing some people to store money under the bed or in vaults, so positive rates on crypto are a real alternative. As banks understand crypto more, they will bring offerings to their clients if they want to hang onto Millennial clients. And it is possible that some governments may launch cryptos”, says Ehrlich.