Institutional cryptocurrency exchange LMAX Digital has been approved for a full Distributed Ledger Technology (DLT) License by the Gibraltar Financial Services Commission (GFSC). LMAX was advised by the law firm Isolas in the licensing process.
Receiving a DLT License from Gibraltar requires attestation of robust risk management processes, effective corporate governance, high standards of customer care, systems and adopting standards of integrity.
LMAX Digital is operated by LMAX Exchange Group, an operator of a Financial Conduct Authority (FCA) regulated trading venues for electronic trading of foreign exchange, metals and indices. According to a release, LMAX pursued the DLT License due to “overwhelming demand” from existing institutional clients seeking to trade cryptocurrencies.
LMAX Digital was launched in May 2018 and claims to be the first regulated Forex exchange operator to launch an institutional focused crypto exchange.
Jenna Wright, Head of LMAX Digital, said the GFSC is leading the way in global regulation of the cryptocurrency market and their approach mirrors LMAX Digital’s values.
“With support from Joey and Emma [of Isolas], it was clear that the Gibraltar regulator has recognized our role in further diversifying institutional currency markets and we look forward to working alongside them and other regulators to help improve understanding of the methods of trading cryptocurrencies. It was great working with the team ISOLAS who brought a high-level of expertise of the blockchain and crypto space to this transaction.”
Wright said they have been delighted by the response from the institutional market. She reported that institutional clients using LMAX Digital have quadrupled since launch with volumes growing 126% and gross revenues increasing 131%
“Having built up a strong institutional following, we are in an excellent position to capitalize on the opening up of cryptocurrency markets to major global financial institutions,” said Wright.
Emma Lejeune, Partner at ISOLAS who led on the transaction, said that having an established and well-reputed group like LMAX regulated as a DLT provider in Gibraltar adds significant value to the evolving industry.
Joey Garcia, the Partner at ISOLAS who heads up the firms Fintech practice, added that the goal of the Gibraltar DLT framework was to establish regulatory certainty while protecting the interests of those in the business.
Since the introduction of DLT licenses in Gibraltar in January 2018, ISOLAS says it has worked on the majority of applications.