Quedex becomes first regulated crypto derivatives exchange
The DLT Providers licence is issued by the Gibraltar Financial Services Commission
Quedex, a Gibraltar-based crypto-futures and options exchanges has been awarded a DLT Providers licence. The licence is issued by the Gibraltar Financial Services Commission and sets the wheels in motion for trading of cryptocurrency derivatives and for custody of cryptocurrencies.
The acquisition of the trading licence makes Quedex the first of its kind to be regulated in this way. Quedex’s DLT licence means that there is now a way to hedge against cryptocurrency volatility in a regulated environment, a move which will likely help push crypto closer to the mainstream whilst mitigating the risks associated with the digital currency, such as fraud.
The DLT licence follows a 15 month-long process in which Quedex, advised by PRT Lawyers, worked together with the Gibraltar authorities in order to meet all the conditions required.
Quedex offers its users, consisting of institutional investors, miners, hedgers and active traders, the opportunity to trade in futures and options contracts on crypto assets on a fully-fledged, transparent and secure financial platform.
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. We are very proud.”
Quedex’ DLT licence means it will be compliant with the nine-core principles central to Gibraltar’s DLT regulatory framework:
Principle One: Honesty and Integrity
DLT providers must act with “honesty, integrity and professionalism”; they must always conduct their operations and communications in an honourable and forthright fashion and never “pose a risk to the public or to the reputation of Gibraltar”.
Principle Two: Customer Care
DLT providers must offer the utmost standards of customer care; they must always ensure all communications are clear-cut and transparent, with full disclosure of any conflicts of interest, and that all customer complaints or issues are dealt with swiftly.
Principle Three: Resources
DLT providers must ensure adequate resources are provided; they must ensure both financial and non-financial resources are available, including adequate insurance and capital.
Principle Four: Risk Management
DLT providers must take a common-sense approach to risk management; they must employ “forward-looking risk management practices” and always consider “risks to its customers and the reputation of Gibraltar in addition to risks to its own business.”
Principle Five: Protection of Client Assets
DLT providers must take significant steps to protect client assets; they must ensure adequate storage, data protection, proper record keeping and other appropriate measures to ensure the maximum wellbeing of all client assets.
Principle Six: Corporate Governance
DLT providers must “have effective corporate governance arrangements”; they must take careful consideration regarding structure, strategy, procedures and corporate culture.
Principle Seven: Cyber Security
DLT providers must demonstrate solid cyber security; they “must ensure that all systems and security access protocols are maintained to appropriate high standards” and all employees, including senior management and board members, must be fully aware of relevant cyber security threats.
Principle Eight: Financial Crime
DLT providers must take a proactive stance against financial crime; they must perform considerable due diligence and KYC vetting in full accordance with the Proceeds of Crime Act 2015 (POCA).
Principle Nine: Resilience
DLT providers must be resilient; they must be fully prepared for all possible contingencies to ensure minimal loss and disruption to clients, even in the event of the company winding down.
Gibraltar’s Minister for Commerce, The Hon Albert Isola MP, commented: ‘From early on in the process Quedex has shown admirable commitment to Gibraltar’s principles-based approach to regulation and I am pleased that they will join the growing group of licensed firms operating from Gibraltar in this evolving space.
“They form part of a strong line up of DLT licensed companies who will help further develop crypto into a maturing and sustainable industry and demonstrate that Gibraltar is leading the way in this industry.’