Crypto Facilities, a British trading firm that specializes in derivatives, has received authorisation from the UK Financial Conduct Authority to operate a multilateral trading facility (MTF).
Obtaining an MTF license will allow the Kraken-owned firm to expand in ways that more closely resemble a traditional exchange, integrating multiple third-party buyers and sellers. Specifically, the FCA’s coveted approval allows Crypto Facilities to expand its product range and serve institutional clients who are mandated to trade on licensed platforms.
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This new offering will adhere to Crypto Facilities’ professional standards in terms of regulatory compliance, secure asset custody and counterparty credit risk management. Additionally, the MTF status means the company has the legal ability to perform such an offering and offers leveraged, cash-settled futures contracts or similar derivatives referencing cryptocurrencies.
“Crypto Facilities has pioneered cryptocurrency derivatives since 2015. We are proud to now become the first licensed cryptocurrency derivatives exchange outside of the US.” said Timo Schlaefer, CEO of Crypto Facilities.
The new approval mirrors similar regulatory permissions in the Europe and allows the company to provide its services throughout the EU from London, operating under a MiFID II passport.
Crypto Facilities is a London-based financial services firm that provides FCA-regulated risk management and trading solutions for digital assets. It was acquired by Kraken last year in a deal that valued the company in the nine figure range. At the time, Kraken said the takeover enables its eligible clients to gain access to futures on six cryptocurrency pairs, providing a unique instrument to trade and hedge cryptocurrencies.
The UK registered startup is currently focused on providing its services in Europe, Latin America and Asia with U.S. availability on the roadmap after its buyout.
“This particular license means that a sophisticated class of investors, limited by their own requirements to interface with a regulated venue such as an MTF, will now have access to crypto derivatives in Europe for the first time. More participants means more liquidity and a better experience for everyone,” said Jesse Powell, CEO and Cofounder of Kraken.
Other crypto startups are also actively pursuing a Multilateral Trading Facility (MTF) license, including Smartlands Platform, which uses Stellar blockchain technology to digitize stocks and equities for participating projects. If approved, this will allow the company and a consortium of partners to safeguard customers securities, transaction settlements, distribute dividends and interest payments, and oversee foreign exchange operations.