Quedex, an exchange platform offering crypto-backed futures, derivatives and options trading, is poised to receive its DLT (Distributed Ledger Technology) Provider Licence from the Gibraltar Financial Services Commission. This would make it the first government-regulated crypto-centric futures and options exchange in the world.
The GFSC has issued an ‘in-principle’ decision to award a DLT Provider licence to Quedex. This is the final stage of the licence authorisation process, leaving Quedex only needing to satisfy the GFSC on one or more conditions before moving on to obtain the full licence. This follows a thorough process of ensuring that Quedex met the GFSC’s “nine principles” for regulation, which includes demonstrating robust security systems and that there are appropriate processes in place to ensure transparency, accountability and protection for the company’s customers.
Quedex gives its client base the opportunity to hedge against cryptocurrency volatility. Its client base consists mainly of institutional investors, miners, hedgers and active traders. The current crypto-centric futures market sees a $4bn daily turnover and, despite the prevalent bear market, it has been growing.
Quedex was the second exchange in the world to offer its users the opportunity to trade in futures and options contracts on crypto assets on a fully-fledged, transparent and secure financial platform. However, after the positive decision from Gibraltar’s regulator, the company is now on the brink of being the first ever regulated operation of its kind. This would mean that its services are considered fully compliant, and in turn, this could result in the opening up of vast possibilities for institutional investors and other traders seeking a platform that is overseen by a financial regulator. Achieving full approval from the GFSC and meeting its strict conditions for regulations would inject a vital element of transparency into a hitherto opaque industry.
In a press release at the end of March, Wiktor Gromniak, CEO and co-founder of Quedex was quoted saying: “The in-principle decision is a landmark moment for us. The licence that we are now well on our way to obtain will give customers additional protections that they can’t get anywhere else, for example around IT security, financial auditing processes and policies around effective corporate governance arrangements. It will help push crypto from unregulated grey areas into transparent environments and we are very proud to be pioneering this movement.”
Quedex has a number of committed investors, themselves profoundly knowledgeable of DLT. One of them is Wojtek Kostrzewa, former CEO of media holding ITI and former CEO of mBank among other high profile c-level roles, who currently serves as Quedex’ chairman alongside his responsibilities as CEO of the successful blockchain startup, Billon. In the Quedex press release, he is quoted in the company’s press release as saying: “Quedex is that rare combination of the right idea, executed by the right people which is what investors are always looking for. Crypto futures exchanges are hot right now, just look at the recent 9 digit acquisition of CryptoFacilities by Kraken, or Nasdaq’s and ICE’s efforts to enter the arena. With the upcoming licensing Quedex has gained critical advantage and is well positioned to seize on the future.”