Achieving full regulatory approval before a crypto exchange is launched is a big deal. Liechtenstein based Blocktrade.com has been granted approved by the Financial Markets Authority, a member of the European Securities and Markets Authority (ESMA), and is set to be the first regulated exchange to open for testing.
The firm has been regulated under the MiFID II framework according to a Forbes report. According to the website.
“Until now, crypto trading has been unavailable to financial institutions. Blocktrade.com will be the first trading venue, fully regulated under MiFID II framework. Furthermore, the platform is able to process more than 1 million trades per second and the performance is being improved every day.”
Luka Gubo, CEO of Blocktrade.com, added; “This is an ideal way for regulators across Europe to recognize cryptocurrencies as a new asset class and put in a regulatory framework,”
Initially, Blocktrade.com will offer Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and Ripple’s XRP trading pairs. Later this year it will offer Crypto Traded Indices, Security Tokens, and Tokenized Assets. It is expected to fully roll out the exchange in September, at the moment only registration is open.
Many institutional investors still regard unregulated exchanges, of which there are over 170, as risky due to lack of transparency. Garbo maintains however that there is still substantial demand for crypto investments from fund managers;
“If an institutional investor wants to invest in cryptocurrencies, they currently have a problem. Where do you send the order to buy? There’s a lot of speculative valuing in cryptocurrencies, so there’s currently no way to lower the volatility — proper regulation is the only way to lower that risk.”
He went on to say that more institutions entering crypto markets will reduce some of the volatility which is also putting off a lot of traditional investors. He also believes that ICOs will eventually be traded on the exchange as the technology is available but they have yet to be regulated.
Gubo commented on the Stock Exchange view of new crypto exchanges; “They see other new crypto exchanges as competition. They are breaking the law and have a huge unfair advantage because they don’t need to follow any rules.”
More regulated exchanges and the possibility of the US Securities and Exchange Commission (SEC) introducing a Bitcoin exchange traded fund (ETF) could have a very positive impact on the industry and crypto prices.