Investing & Digital Assets

A share of stock and a bitcoin look like different things, and the businesses that hold them run on the same promises: the customer owns what the ledger says they own, an order gets the best price the market offers, assets are kept apart from the firm's own, and anyone can be shown that what's owed is actually held. A broker keeps those promises through a clearing house, a depository and a century of rules written after each crisis; a crypto exchange keeps them with keys, wallets and a chain that settles in minutes and never closes; a stablecoin issuer keeps one more, a dollar on chain for every dollar in reserve, redeemable on demand. When a firm broke those promises, as Lehman, MF Global, Celsius and FTX did, the ledger and the assets stopped agreeing, and every rule in this book is a guard against that. This book surveys how the industry does each piece, benchmarked across Robinhood, Schwab, Fidelity, Interactive Brokers, Coinbase, Kraken, Gemini, Binance, Circle, Tether, Paxos, Anchorage, BitGo, Fireblocks, BlackRock, Uniswap, Aave and the others, with no single company as the model, and how you'd build it, extending one core data model chapter by chapter.

It reads in thirteen parts, plus a reference. The Business: the parties and how money flows, the landscape, how brokers and exchanges make money, regulators and licenses, and the crises that wrote the rules. Accounts and Positions: opening accounts, ledgers and buying power, funding and transfers, cash sweeps and yield, corporate actions and chain events, fractional shares, tax lots and wash sales, and statements and tax forms. Trading and Markets: orders, equity market structure, routing and best execution, order books and matching engines, market data, options, margin and short selling, pre-trade risk and halts, 24-hour trading, futures, and prediction markets. Clearing and Settlement: clearing and T+1, customer protection and SIPC, books, records and the audit trail, market surveillance, and brokerage as a service. Wealth and Advice: Reg BI and fiduciary duty, robo-advisors, tax-loss harvesting and direct indexing, retirement accounts, performance, and advisor platforms. Chains and Wallets: blockchains for platform engineers, tokens, keys and signing, wallets, chain data, and layer 2s and bridges. Crypto Exchanges: how an exchange works, deposits and withdrawals, hot and cold wallets, listings, trading products, perpetuals, staking, proof of reserves, security and hacks, and the 2022 collapse. Institutional Crypto: qualified custody, custody platforms, crypto ETPs, prime brokerage and lending, and accounting. Stablecoins: the business, issuing one, the law, freezes, and depegs. Decentralized Finance: DEXs and AMMs, lending and liquidations, oracles and MEV, smart contract risk, and DeFi from a regulated platform. Tokenization: tokenized funds, tokenized stocks, and transfer agents. The Rules: securities or commodities, licensing, AML and the Travel Rule, on-chain analytics, crypto tax, and beyond the US. Running the Platform: architecture, peak days and outages, account security, AI, metrics, and conversions and shutdowns. Reference: a glossary of every term, grouped by part.