Crypto Facilities Gets FCA Nod to Set up Crypto Futures Venue
Crypto Facilities, a subsidiary of Kraken cryptocurrency exchange, has obtained a Multilateral Trading Facility (MTF) license from the UK’s Financial Conduct Authority (FCA).
An MTF is a European regulatory term for a self-regulated financial trading venue. MTFs are an alternative to a traditional stock exchange where a market is made in securities, typically using electronic systems.
Touting this as a first on the European continent, Crypto Facilities says the license enables it to expand its product range. It will do this whilst staying inside the regulatory perimeter.
Traditionally, an MTF license is usually granted to approved market operators or larger investment banks. This is to allow retail investors to trade financial securities.
For Crypto Facilities, getting a nod from a regulator means it is now better placed to serve institutional clients.
In a statement, Jesse Powell, CEO and Cofounder of Kraken, says getting the license means constrained investors can interface with a regulated venue such as an MTF. This gives them “access to crypto derivatives in Europe for the first time.”
Powell adds, “We undergo these licensing efforts because Kraken is about making crypto accessible for everyone.”
Crypto Facilities’ MTF announcement comes a few days after FCA’s release of findings of a cryptocurrency research study. The research shows an increase in the number of UK citizens owning cryptocurrency.
In addition to Crypto Facilities’ validation, regulated institutions opt for MTF because they offer a level playing field for all market participants.
Buyers and sellers are matched according to a set of transparent rules that do not discriminate between members. When buying an instrument at a certain price, a user able to do so if a corresponding sell order is available.
Also, MTFs are compliant with the European Union’s (EU’s) Markets in Financial Instruments Directive II (MiFID II). MiFID II aims to increase competition in the financial markets and enhance investor protections.
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