FINRA Approves WisdomTree to Transact in Blockchain-Enabled Funds

WisdomTree Securities, a subsidiary of the NYSE-listed financial company, WisdomTree, has received Financial Industry Regulatory Authority (FINRA) authorization as a broker-dealer. The newly obtained membership enables the transaction execution in blockchain-enabled funds offered by WisdomTree Prime mobile app.

The newest announcement is another step in building the company's digital strategy, which is an evolution and extension of its core ETF business. The Securities and Exchange Commission (SEC) recently declared the WisdomTree Short-Term Treasury Digital Fund effective (the first blockchain-enabled fund prepared by WisdomTree). What is more, the company broadened its strategic agreements with key payments, fintech firms and banking players.

"FINRA membership approval is a key regulatory milestone, for us, leading up to the launch of WisdomTree Prime, enabling us to act as an intermediary for customers to transact in new blockchain-enabled funds," Jarrett Lilien, the President and COO of WisdomTree, said.

"As always, our priority is to provide investors with the best product structure – which is ETFs today, and we believe blockchain-enabled funds are the best product structure of tomorrow."

WisdsomTree assets under management (AuM) exceed $79.1 billion. The company is currently offering over 50 cryptocurrency-focused ETFs and ETPs based on Bitcoin (BTC), Ethereum (ETH), Polkadot (DOT), Cardano (ADA), Solana (SOL) and crypto baskets merged in indices.

WisdomTree Reported Mixed Results in Q3

According to the latest financial quarterly report published in late October, WisdomTree operating revenues in the three-month period which ended 30 September 2022 reached $70.9 billion, falling modestly when compared to the last quarter and the same period a year earlier.

Additionally, the AuM dropped to $70.9 billion, declining from $74.3 billion reported in the second quarter and $72.8 billion from Q3 2021. WisdomTree's net inflows stood at $1.7 billion, which was visibly lower on a quarterly basis ($3.9 billion in Q2 2022), but surpassed historical averages and the result from last year when the index was at $0.5 billion.

"Operating expenses increased 13.3% as compared to 2021 primarily due to higher incentive compensation and headcount, professional fees including $4.5 million incurred in response to an activist campaign and professional fees associated with our digital assets initiative, fund management and administration costs, marketing expenses, sales and business development expenses, other expenses and third-party distribution fees," WidsomTree commented in the financial report.

When it comes to cryptocurrencies, the digital assets AuM ended Q3 at $163 million, rising from $151 million in Q2, but falling significantly from $295 million reported in Q3 2021. Cryptocurrencies still account for only a tiny proportion of WisdomTree's assets (0.3%), but the company wants to bet on the dynamic growth of its offering within this booming industry.

"Our approach is to bring crypto mainstream and to bring mainstream exposures," the company added in the latest quarterly report.