Talking B2B Liquidity and Crypto With Andrey Stoychev, CEO of VS Capital

Talking B2B Liquidity and Crypto With Andrey Stoychev, CEO of VS Capital

When I caught up with Andrey Stoychev, CEO of VS Capital, in Dubai at the ForexExpo last October, it was the first time I had seen the new VS Capital branding. Having walked around many of seemingly TikTok-focused broker booths I found the sort of stand I would be attracted to if I was an asset manager/hedge fund, the Financial Times reader shall we say. The website is similar (see the subliminal FT connection?) Something about the branding says ‘sophistication’ and ‘collaboration’. Cool sophistication – not shouty lambos. VS Capital is a serious, measured, B2B participant.

Andrey has a deep understanding of the requirements of his clients which comes from long market experience and a deep understanding of what it takes to be successful in this field: what works for his business must also work for the businesses he is servicing. Everyone in the chain needs to be in harmony, as far as possible.

Start with risk and dealing, and you see markets differently

The two minute version of his background; the experience this provides matters to clients.

Andrey has been in the industry for 21 years. He spent 12 years at Bulgarian based multi-asset broker DeltaStock, starting his career in risk and dealing, with the last five to six years as a director, rising to Chairman of the Board.

“I started originally in the risk and the dealing. This is still my thing.”

From there, he moved into helping Trading 212 build a risk team and support its move into stock trading, then joined JFD, where he led liquidity before becoming a Director.

Risk is clearly something he understands and focuses on.

Speaking to Andrey, I wanted to help LiquidityFinder’s audience understand what VS Capital is, what makes it different in a crowded B2B market, and why Andrey believes crypto liquidity has become the firm’s sharpest wedge to open doors.

Andrey Stoychev CEO, and Lukas Varenackas, Partner, VS Capital.

Why set up VS Capital and why the focus on Crypto?

Andrey’s answer as to why he set up VS Capital and why he is particularly focused on Crypto, delivered in his blunt style, was that most brokers have not seen meaningful crypto flow for a very basic reason: they have been offering a poor product and charging too much for it.

He put it like this: “I thought the reason why FX/CFD brokers were not facing a lot of crypto flow is because they were, first of all, offering a sh*t product in general, and also very expensive. All of the companies are pretty much the same in terms of offering - the same Eurodollar, gold… the same conditions, the same commissions, the same technology.”

 “I noticed the difference between the FX and crypto worlds in terms of making the pricing, execution, trading in general, and liquidity.”

If brokers weren’t seeing meaningful crypto flow, it wasn’t because clients didn’t want it, but because what brokers were offering was overpriced and uncompetitive, with execution and liquidity that didn’t stand up when conditions got fast.

Then he added a point that went beyond pricing and into trust. The pricing and execution might look similar whether you trade perpetuals on an exchange or a crypto CFD with a broker, but the experience and the accountability are not the same. Andrey’s view is a customer is better served dealing with a well-regulated broker, rather than being pushed towards unregulated venues for perpetual futures. Regulation forces a level of oversight that many exchanges simply don’t offer.

Crypto is a market structure problem that most brokers have not solved, and the brokers that solve it will unlock real flow. So, the suggestion is: offer a solid crypto product in a well-regulated and accountable environment.

"And this is how we position ourselves in the B2B space. OK, we are giving pretty much the same conditions for forex, for indexes, for commodities, etc. But we are very, very good in crypto CFD liquidity. Soon we expect that we will be able to expand to spot crypto, as part of our broader group strategy. Our Cyprus entity is exploring the development of spot-crypto services within its regulatory framework, while VS Capital is also assessing licensing options outside Europe in order to be able to offer spot crypto in the future."

If brokers can offer crypto exposure with better pricing and a more robust regulatory wrapper, then the broker channel becomes the safer and more scalable on-ramp for many clients into crypto.

VS Capital’s Evolution

VS Capital originally started as a consulting firm operating under a different name, where focus was to help brokers manage risk better as well as bring new business. 

As a consultant, VS did not face any clients directly, as they were onboarded with few trusted and regulated brokers, with which Andrey worked with for many years. As business and client requirements grew, it became clear that the next step was to establish an independent licensed entity – that’s when Andrey and his partners formed VS Capital and applied for an FSA license in Seychelles. Existing business was shifted into the Seychelles entity and he built out the VS Capital structure there. (I know of other brokers that say Seychelles puts you under as much scrutiny, if not more, than the UK’s FCA).

To serve European clients under appropriate regulatory frameworks, a separate affiliated entity within the broader ownership structure was acquired in Cyprus which operates under CySEC authorisation. VS Capital itself continues to operate independently under its Seychelles regulatory permissions.

There were some B2B opportunities that could not be onboarded outside Europe and there was demand from European clients that Andrey did not feel comfortable onboarding in Seychelles. “I prefer, if we are having European clients, to be onboarding in European entities” he explains. Another consideration was the group’s intention to strengthen its position in the crypto space by applying for relevant Crypto Licenses in respective regions.

Now VS Capital is in a place, unlike many crypto native firms, where scrutiny is real, accountability exists, and the operation is forced to run under serious regulatory scrutiny.

So, what are the opportunities in the B2B space?

I asked Andrey to share where he sees opportunities in the B2B space. Definitely crypto due to its volatility, and it’s an area where liquidity can be improved, “That’s why we are pushing Crypto CFDs a lot…And this is our main selling point. The other one, obviously, these days, is very challenging gold stuff.”

 “With gold, it's very complicated. Maybe it's an opportunity or maybe it's a topic which brokers need to be more careful of and to use more risk management tools. With the most current Gold flow, I would say, it's better to be on the safe side, to go to the street, because there can be some very, very strange behaviour. There are a lot of toxic strategies around, which are trying to take advantage of a broker’s good conditions. That's why brokers start giving worse conditions.”

“Actually, these [worse conditions] are coming from the liquidity provider because brokers notice that they cannot handle this. So that's why they start sending flow to LPs. Liquidity providers start receiving this toxic flow, and they say, ‘OK, it's not for the primary feed. I'm giving to the secondary feed’, which is worse than the primary one. And then the retail brokers start giving worse conditions to their clients. In that sense it’s very simple.”

“I can see a lot of front-running, a lot of arbitrage strategies, futures versus the spot, some hedge strategies as well. So, you know, there is a lot of complicated and some predatory flow that‘s not really good for the brokers.”

Client onboarding

I asked Andrey what they look for when onboarding a new client. Traditionally a B2B broker needs a trading statement showing the kind of flow they are going to get. “Actually, a trading statement, is a very traditional request.  I’m not a fan of this traditional stuff and I'll explain why. First of all, the statement will be historical. Then if I'm onboarding a new retail broker, these guys can sometimes send only part of their client statements, but it's still just historical trades... I have no idea how it will go once they are live. And the broker in general, they have little control what will be tomorrow and the day after tomorrow. So I literally prefer to onboard clients and see the flow first hand, and then we can adjust our approach based on what flow looks like real time.”

So, you're quite happy to onboard somebody just on face value and test them out and then adjust as you go live?

 “Exactly, because also - we have some clients who start improving their own business because of us…because they're using our liquidity, they start selling to their retail clients and they start facing more volume and this volume is coming to us.”

“Also, what type of statement are they going to send me for crypto...? If they were using, let's say, the crypto liquidity from (Prime of Prime X - name redacted), or any other Prime of Prime – mostly because of the costs there will only be a few trades. And then, when they start using my liquidity, they will start receiving more flow, which will be completely different and new for them, and obviously, that information is not in the statement they have provided.”

Andrey is basically saying that when people start trading with VS Capital, the nature of their trading might change (improve) because they see an improvement in their pricing and their liquidity and execution.

Asset Managers and funds are a different story. “This type of client is coming with specific requirements, because they know their strategy, they know what they're doing. And they were doing this in the past, so they know that they need, let's say, top-of-the-book five bitcoins, or two lots of gold. They know exactly, and they know that they are trading every five minutes, or every hour, or they are intraday.  So with these clients we can discuss, we can check the statement, and we can address their requirements.”

What’s the counterparty risk with VS Capital?

If someone was to ask, “What’s the risk of my counterparty if I trade with VS Capital?” How do you reassure them?

“Well first of all, we operate under Seychelles regulation and maintain the required capital there. Also within the broader group there is a separately regulated entity in Cyprus, which also has its own capital requirements. We maintain fully segregated client accounts and follow a conservative approach to risk management - even if regulation allows rehypothecation under certain circumstances, we choose not to take unnecessary risks with client funds and use our own capital. In the Seychelles, segregated client accounts are also insured through Lloyds. Our balance sheet is not a problem for most of the brokers but in some specific cases, where a client is a lot larger than VS, we post capital with them, which further alleviates counterparty risk.”

VS Capital’s Crypto Liquidity

So what makes your crypto liquidity different, and where does it come from?

 “We have our own technology where we integrate 10 plus different liquidity providers. Let’s say market-makers, exchanges, some other OTC desks, etc.”

Because VS Capital is aggregating many sources, he said that most of the time the spread they receive at source can be “inverse”. In other words, the best bid can be above the best offer at that instant due to microstructure, latency, and cross-venue differences.

“Because with these 10 plus liquidity providers, most of the time, our aggregated spread is… Inverse.”

He then pointed out the practical problem. “Especially in MetaTrader 5, it’s not allowed.”

He described an instance when they tried to pass inverse pricing through a bridge to a broker. “They told us, ‘why are you sending this? It’s not normal.’  And I said, okay. Let's put a minimum $1 on Bitcoin. And after that, we start sending the pricing with the minimum $1 just to be sure that we are not giving them a negative spread.”

A-book or B-book?

I will take any opportunity I can to ask a broker about their approach to A-book and B-book.

Andrey: “Honestly, these days, it’s around 50-50 (A-book v B-book), I would say, but it depends.  With retail brokers, I have no idea what they're going to send me next week. So, that's why, with these guys, I'm trying to be more careful and prefer not to take a lot of risk. Of course, if some of the positions can be net between clients, of course, I can do this and I can save some money and be more profitable.  But if the flow is directional, I prefer to try to be on the safe side and not to take risk.”

Gold and Crypto are 2 areas that Andrey would recommend retail brokers to offset their risk as much as possible. “Most brokers do not understand crypto well so naturally they are more risk-averse and that’s the right approach – you should offset your risk with a liquidity provider that understands the asset class more.”

Crypto is structurally more volatile and more fragmented than FX. It trades continuously, including weekends, and client behaviour can change quickly when you improve execution quality. Andrey’s comments reinforce that the biggest risk is not only market volatility. It is the feedback loop between execution quality, client behaviour, toxicity profiling, and the liquidity tier you ultimately receive.

Andrey’s approach to crypto liquidity includes multi-source aggregation, clear constraints around how pricing is distributed into broker platforms, and a risk posture that starts cautious and adapts based on observed flow.

The way Andrey frames VS Capital’s crypto liquidity is very direct. He does not pitch it as them being “crypto-native” but as CFD people who went into crypto with a broker’s mindset, because the end product has to work inside a CFD environment. In his view, most providers underestimate how different redistribution is versus trading on a venue, so the real job is packaging crypto liquidity in a way a broker can actually run: stable enough for platforms, consistent enough for clients, and engineered for the realities of a dealing desk.

He also described an advantage that is not purely technological. The model leans heavily on relationships that already sit deep in the exchange ecosystem. In simple terms, VS Capital piggybacks on those relationships to access higher-quality exchange pricing, without a retail broker client having to “earn” it slowly through its own volume brackets first. VS Capital also has dedicated streams from specific counterparties that are shaped for broker distribution, including streams that are intended to be exclusive for redistribution into the CFD market.

The other piece of the ‘magic sauce’ is the market making and risk component in the middle that plugs any gaps. Crypto is fragmented and can look liquid until you hit it, especially in fast markets and on weekends. So they focus on keeping top-of-book liquidity credible, not just tight, including depth and refresh behaviour that dealers care about, making sure pricing does not fall apart when it is tested.

VS Capital offer pricing transparency, meaning raw spread plus commission, with a clear all-in cost mindset and volume tiers that can take commissions down to very low basis-point levels.

The message is that if brokers want crypto flow to grow, the product has to be consistent, the economics have to be honest, and the liquidity has to behave when it is actually traded.

The VS Capital team in Dubai at ForexExpo

You can contact Andrey directly here, or send a message direct to the team by clicking on CONTACT US from their LiquidityFinder page here.

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Author

Sam Low is the Founder of LiquidityFinder. With over 18 years in working with FX trading technology, Sam has deep experience in the FX (forex) trading industry, working with brokers, liquidity providers and end traders themselves.  You can message Sam directly here.