Quedex, a trading venue offering digital asset futures and options, has become the first regulated crypto-derivatives exchange after being granted a license to operate in Gibraltar.
The Gibraltar-based exchange announced it had been granted a Distributed Ledger Technology (DLT) Providers license by the Gibraltar Financial Services Commission (GFSC) for trading cryptocurrency derivatives and for crypto custody services.
The license, awarded following a 15-month consultation process with the GFSC and other local authorities, makes Quedex the world's first crypto-futures and options exchange to become fully regulated, the company said in a press release.
Derivatives Under Scrutiny
Crypto-derivatives have come under deep scrutiny by global regulators. The UK's Financial Conduct Authority wants to ban the sale of derivatives, such as futures and options, linked to cryptocurrencies to retail investors, saying it is too difficult to value them reliably.
In the US, a number of specialized crypto-derivatives exchanges are still awaiting approval from the Commodity Futures Trading Commission, while existing derivatives exchanges, such as CME Group and CBOE are offering cash-settled bitcoin futures contracts.
What makes Quedex different is that trades are settled in its home currency - bitcoin. The company says it also plans to further expand its product offering to several alt-coins.
Wiktor Gromniak, CEO and co-founder of Quedex said:
In order for the crypto industry to mature and to welcome more institutional investors into our tent it is of the essence that we create transparent financial markets and develop sophisticated financial products, such as futures and options. Being licensed by a very well respected and forward thinking jurisdiction like Gibraltar is a landmark moment for this industry in general and Quedex specifically.
Its license makes the company compliant with the nine-core principles to Gibraltar's DLT regulatory framework, all of which are designed to protect consumers and businesses using digital assets. The company added:
Clients will enjoy far greater security and more transparency in a traditionally opaque industry.
Quedex's clients consist of institutional investors, miners, hedgers and active traders, the company said. It added that the exchange now offers these clients a way to hedge against cryptocurrency volatility in a regulated environment.
This is an important step in mainstreaming crypto and making it more attractive to professional, corporate and institutional investors.