Institutional cryptocurrency exchange LMAX Digital today announced that it received an in-principle decision on the firm’s application from Gibraltar’s financial services watchdog to operate as a Distributed Ledger Technology (DLT) provider. The ‘in principle’ decision is the final stage of the license authorization process, where LMAX Digital needs to satisfy the GFSC with respect to one or more conditions before obtaining a license.
LMAX Digital is part of foreign exchange trading business LMAX Exchange Group, which operates FX execution venues such as LMAX Exchange (FCA regulated MTF) and LMAX Global (FCA regulated broker).
LMAX Digital operates under similar rules and governance of its parent’s FCA-regulated multilateral facility (MTF), and its functionality is based on the venue’s existing technology stack. It offers to trade digital assets at the request of its existing institutional client base.
Gibraltar Financial Services Commission (GFSC) requires licensed firms to demonstrate it has adequate financial resources, IT systems, and controls to comply with anti-money laundering and terrorist financing rules.
As such, engaging in business with a company approved by the GFSC offers clients several guarantees regarding the safety of their funds, and the trustworthiness of the service with which they are working.
Attracting blockchain startups is seen as one way of bolstering Gibraltar’s thriving financial services industry after the self-governing territory, along with the UK, will leave the EU later this year.
LMAX CEO values the regulatory input
Simply matching buyers with sellers within an anonymous execution venue, LMAX Digital offers its users better price discovery and conflict-free execution in major cryptocurrencies like Bitcoin, Litecoin, Ethereum, Ripple and Bitcoin Cash.
LMAX Digital also offers cryptocurrency custodian services to clients who trade on its exchange, which solves one of the major problems that have prevented institutional investors from dabbling in the virtual asset class
Commented on the news, LMAX Exchange CEO David Mercer said: “We believe regulatory input is essential for the growth of the crypto currency market. LMAX Exchange Group has always supported regulatory oversight and we work proactively with regulators to help foster a transparent and trusted marketplace for all market participants.”
He added: “LMAX Exchange Group operates multiple institutional FX trading venues, which combined have traded over $12 trillion to date, and brought trust, best-in-class technology and transparency to the global FX market. We are very pleased that our efforts to create a more transparent and secure marketplace have been recognised further with the award of this license.”