Gemini to Offer Crypto Perpetuals under New MiFID II License: Is CFDs Next?

Cryptocurrency exchange Gemini, which recently selected Malta as its European hub, has received in-principle approval for an Investment Firm licence from the Malta Financial Services Authority (MFSA).

A Pan-European Derivatives Licence

Once the licence is approved, the exchange can offer regulated options and futures, including contracts for difference (CFD) instruments, throughout the European Economic Area (EEA) under the Markets in Financial Instruments Directive (MiFID II).

The official announcement highlighted that Gemini plans to offer perpetual futures contracts, which are futures contracts without an expiry date, throughout the bloc.

Furthermore, the crypto exchange pointed out that the MiFID II licence is part of its European expansion strategy and will allow it to expand offerings for institutional and retail customers.

“Interest in crypto derivatives, particularly from institutions, has increased significantly in recent years, as crypto matures into a recognised asset class,” said Mark Jennings, Gemini’s Head of Europe, adding that the exchange is committed “to providing a best-in-class offering for retail and institutional investors.”

Crypto Exchanges Move into Derivatives

As Finance Magnates reported earlier, Gemini obtained a Virtual Financial Assets (VFA) Service Licence from the regulator on the Mediterranean island, making it its hub for the Markets in Crypto-Assets (MiCA) framework. It also holds a similar licence in France.

However, those crypto licences do not allow companies to offer crypto derivatives; thus comes the MiFID II licence.

Many crypto exchanges have recently obtained MiFID licences to offer derivatives in the EEA. Finance Magnates earlier exclusively reported that Coinbase obtained the MiFID II licence by acquiring the Cypriot unit of BUX, which previously offered CFDs. Recently, Kraken also obtained a similar licence by buying a Cypriot firm but did not disclose which one.

Although these crypto firms seem interested only in offering crypto perpetual futures for now, they could easily enter the CFD industry in the future. After acquiring a CFD broker in Australia, Crypto.com has already shown that such instruments are not off-limits for crypto exchanges.