Crypto Exchange LMAX Digital Receives ‘In Principle’ Gibraltar DLT Approval

News, Regulation | March 11, 2019 By:

Institutional crypto exchange LMAX Digital has received an ‘in-principle’ decision from the Gibraltar Financial Services Commission (GFSC) to operate as a distributed ledger technology (DLT) provider.

LMAX Digital was created by UK foreign exchange trading platform operator LMAX Exchange Group in 2018 as a response to clients who wanted access to cryptocurrencies. The platform is governed by similar rules and principles as LMAX Exchange Group’s FCA regulated entities. This ensures the exchange operates with best-of-breed security, compliance, know your customer (KYC) and anti-money laundering (AML) policies and procedures, and market participants are treated equally regardless of status, size or activity levels.

Gibraltar’s DLT regulatory framework applies to activities, not subject to regulation under any other regulatory framework, that use DLT for the transmission or storage of value belonging to others. Applicants are required to meet nine regulatory principles to ensure that the GFSC’s regulatory outcomes are achieved. These include robust risk management processes, effective corporate governance, high standards of customer care, systems and security controls to combat financial and cybercrime, and adopting standards of honesty and integrity.

According to LMAX Digital, they received an in-principle decision from the GFSC, which indicates that the company complies with the nine regulatory principles. An in-principle decision is the final stage of the license authorization process, where LMAX Digital needs to satisfy the GFSC with respect to one or more conditions before obtaining a license.

David Mercer, CEO of LMAX Exchange Group, said that LMAX Digital was designed to address the challenges that have hindered institutional growth in the crypto currency market, such as fragmented liquidity and a lack of regulation and institutional grade technology platforms.

“LMAX Digital has filled the gap in the crypto market by providing institutions with a trading platform they trust, with deep liquidity, security of funds, and high performance, proven technology,” said Mercer. “We believe regulatory input is essential for the growth of the crypto currency market. LMAX Exchange Group has always supported regulatory oversight and we work proactively with regulators to help foster a transparent and trusted marketplace for all market participants. We are very pleased that our efforts to create a more transparent and secure marketplace have been recognised further with this in-principle decision.”