London, Gibraltar. 1st May 2019 – Blockchain law firm, ISOLAS LLP, has advised institutional cryptocurrency exchange, LMAX Digital, in receiving its full licence as a DLT provider from the Gibraltar Financial Services Commission (GFSC).
LMAX Digital is operated by LMAX Exchange Group, a leading independent operator of FCA regulated trading venues for electronic trading of foreign exchange, metals and indices. Based on LMAX Exchange’s proven, proprietary technology, LMAX Digital was built in response to overwhelming demand from the Group’s institutional clients who wanted a credible, efficient and trusted platform with high quality deep liquidity, on which to trade digital currencies with like-minded institutions.
It was launched in May 2018, becoming the first cryptocurrency exchange established by a regulated FX exchange operator and the only deliverable crypto currency exchange dedicated to institutional clients. The recently granted licence confirms LMAX Digital is compliant with the nine regulatory principles set out in Gibraltar’s DLT regulations, designed to protect consumers and businesses using digital assets stored or transmitted on distributed ledgers.
These regulatory principles include robust risk management processes, effective corporate governance, high standards of customer care, systems and security controls criminal activity, and adopting standards of honesty and integrity.
Emma Lejeune, Partner at ISOLAS who led on the transaction, says: “Having an established and well reputed group like LMAX regulated as a DLT provider in Gibraltar adds significant value to the evolving industry. It is also testimony of the high calibre of applicants seeking to be regulated in the jurisdiction.”
Joey Garcia, the Partner at ISOLAS who heads up the firms FinTech practice, comments: “The objective of the DLT framework has always been to develop a purpose built appropriate regulatory framework that not only provides regulatory certainty for firms using nascent technology for dealing with new asset classes, but also seeks to protect the interests of the users of those businesses. We have always aimed to set an extremely high bar to entry and in that context it’s a pleasure to have worked with LMAX as such a high calibre group in meeting all of these requirements, and a pleasure to welcome the group to Gibraltar.”
Jenna Wright, Head of LMAX Digital, comments: “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, it was clear that the Gibraltar regulator has recognised 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 crypto currencies. It was great working with the team ISOLAS who brought a high-level of expertise of the blockchain and crypto space to this transaction.”
“LMAX Digital launched less than 12 months ago and in that short time, we have been delighted with the positive response from institutional market participants. The number of clients using LMAX Digital has quadrupled since Q2 2018 and trading volumes have grown 126%, resulting in gross revenues also increasing 131%. Having built up a strong institutional following, we are in an excellent position to capitalise on the opening up of crypto currency markets to major global financial institutions.”
Since the introduction of DLT licences in Gibraltar on 1st January 2018, ISOLAS has worked on the majority of applications. Recent work has included supporting Coinfloor, which received the very first DLT licence in Gibraltar, and, more recently, Huobi. ISOLAS also advised RSK on its protocol layer developments, the prediction market platform Gnosis, Xapo on its e-money licence and the Gibraltar Stock Exchange GSX on its development into the space through GBX.