In this week’s roundup, we also look at Raiffeisen Schweiz joining SIX Digital Exchange, Metalpha’s investment, and Coinbase’s move to offer derivatives products in Europe.
The International Organization of Securities Commissions (Iosco) has published its final report with policy recommendations for decentralised finance (DeFi) to address market integrity and investor protection concerns arising from DeFi.
The risks of crypto-asset markets are real and we are tackling these in a coordinated manner - Jean-Paul Servais, Iosco
The recommendations cover six key areas, consisting of understanding DeFi arrangements and structures; achieving common standards of regulatory outcomes; identifying and managing key risks; clear, accurate and comprehensive disclosures; enforcement of applicable laws; and cross-border cooperation.
The DeFi policy recommendations came after those for crypto and digital assets (CDA) markets issued in November 2023.
‘The risks of crypto-asset markets are real and we are tackling these in a coordinated manner, seeking consistent implementation of these Iosco recommendations across our membership to best protect investors globally,’ Jean-Paul Servais (pictured), chair of Iosco, said in a statement.
Iosco stated it is now shifting its attention towards ‘implementation monitoring, capacity building and technical assistance needs of its members’.
Coinbase to offer derivatives products in Europe
As crypto trading volumes reach their highest level since 2022, Coinbase, the biggest cryptocurrency exchange in the US, is seeking to acquire a Cyprus-based entity with the EU’s Markets in Financial Instruments Directive (Mifid) license to expand its derivative product offering in the Eurozone.
‘This license would help expand access to our derivatives products by allowing Coinbase to offer them to eligible European customers in select countries across the EU,’ the exchange stated in a recent blog.
Acquiring the Cyprus-based entity ensures compliance with its “Five-point Global Compliance Standard” – consisting of anti-money laundering (AML), know your customer (KYC), global sanctions enforcement, governance best practices, and ongoing monitoring and reporting.
With a Mifid license in the EU, it would help the US crypto exchange giant to expand its customer base as derivatives accounted for over 75% of the global crypto market, it stated.
While the exchange stated it still has a ‘long road ahead’ before finalising the acquisition and operationalising the EU Mifid licensed entity, the deal, subject to regulatory approval, would be expected to close later in 2024, it added.
Led by CEO Brian Armstrong (right), Coinbase obtained registration approval from France's financial markets authority last month to operate digital currency services as the exchange continued its global push.
In June 2023, it started offering Bitcoin (BTC) and Ethereum (ETH) futures through its regulated derivatives exchange ‘specifically targeted towards institutional investors’.
Raiffeisen Schweiz joins SIX Digital Exchange
Raiffeisen Schweiz has joined SIX Digital Exchange (SDX) as its new member for digital securities. The move aligned with the Swiss banking giant’s ‘ambition to issue native digital products,’ according to a joint statement.
‘By joining the SDX ecosystem, Raiffeisen Switzerland increases its footprint and experience in digital assets with the aim of actively contributing to the development of the digital assets industry and product landscape,’ said Werner Leuthard (right), head of trading at Raiffeisen Switzerland.
SDX offers a blockchain-based platform for the issuing, trading, settling, and custody of digital securities. In December 2023, the exchange announced it had successfully tokenised private shares of Aktionariat AG on its regulated blockchain-based central securities depository (CSD), with Berner Kantonalbank (BEKB) serving as the issuer agent and custodian.
AsiaNext rolls out crypto derivatives trading
AsiaNext, an institutional-focused digital asset trading venue, has launched crypto derivatives trading, according to its announcement on 9 Jan.
The Singapore-based venue is a joint venture between SBI Digital Asset Holdings (SBI DAH) and SIX. Its risk management process and capabilities to support frequent intra-day margining and settlement runs create ‘capital efficiencies’ for investors. It stated it also supports ‘low latency and high frequency’ trading available 24/7 for crypto derivatives.
Having received its capital markets services and regulated market operator licences from the Monetary Authority of Singapore in 2023, AsiaNext stated it would provide a broad product pipeline, including 'digital securities, tokenised real-world assets, and sustainability-focused listings'.
‘The main motivation was to create a fair, orderly and transparent venue through which institutions can transact with confidence; that helps them realise the benefits of digital assets and crypto, while helping to minimise the downside risk,’ said Chong Kok Kee (above right), CEO of AsiaNext.
Metalpha invests in NextGen Digital Venture
Metalpha Technology Holding, a Hong Kong-based crypto-focused wealth management company, has invested in digital solution provider NextGen Digital Venture, strengthening the existing business partnership which provides institutional investors investment channels for exposure to digital assets.
In April 2023, Metalpha partnered with NextGen to launch Next Generation Fund I in Hong Kong SAR – a structured investment channel focusing on Grayscale Investments' suite of products – which fund outperformed Bitcoin's annualised return by over 35% as of 31 Dec, the firm stated.
Led by Metalpha’s president and director Adrian Wang (right), the firm added that the latest investment will provide NextGen with additional management support.