Institutional investors have been treading carefully around crypto exchanges so far, due to an apparent lack of regulation and volatility, stirring the markets on a daily basis. Nonetheless, they now have a convenient entry point when it comes to virtual currency trading, as the London-based LMAX Exchange Group has launched the first physical cryptocurrency exchange for institutional clients.
The so-called LMAX Digital platform is reportedly an outcome of numerous requests by LMAX clients who wanted to access the crypto market. The platform‘s development is over and its clients will be able to trade the most popular digital currencies on the market – bitcoin, ethereum, bitcoin cash, ripple, and litecoin. Trading will be available 24/7.
CEO of the LMAX Exchange David Mercer claimed in the official statement that, “We are furthering the legitimization of the cryptocurrency market by offering institutions a platform on which to acquire, trade and hold cryptocurrencies securely with high quality, deep liquidity.“
LMAX Digital will trade virtual currencies on a transparent central order book, a method widely used in traditional financial markets, such as currencies, equities, and futures. An option to store assets will also be available. The company has a reputation of being one of the biggest liquidity providers in the forex markets and promises that trades will be executed within microseconds, helping to avoid the volatility that has been deterring the institutional investors.
The exchange will start the operations from its London data center but plans to open offices in New York and Tokyo a little bit further down the road. As LMAX is regulated by the Financial Conduct Authority (FCA), it will be governed by its strict rules. This means that security policies such as know-your-customer and anti-money laundering procedures will be applied, in addition to full regulatory compliance.
According to Mr. Mercer, LMAX can boast trading over $10 trillion since opening its exchange and having institutional clients in over 100 countries. The exchange hopes that its launch and thus, a validation of digital currency markets, will help to encourage banks, asset managers, and wealth funds to enter the crypto market.
He went on to add that, “The rise of institutional trading of cryptocurrencies will be a game-changer for the industry. We believe our new exchange will support the transformation of the crypto market from the fringes to the mainstream. Digital currencies are, without a doubt, coming of age.“
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