The Gibraltar Financial Services Commission (GFSC) made an in-principle decision to grant London-based crypto exchange CEX.IO its authorization as a distributed-ledger technology (DLT) provider.
The decision comes as the firm completes its platform testing period with other UK applicants, including most recently LMAX Digital, the cryptocurrency arm of FX trading business LMAX Exchange Group.
An “in-principle” decision is the first stage of the full authorization process whereby the applicant needs to satisfy the GFSC on one or more requirements in order to obtain a license.
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CEX.IO said that it would continue to work with the regulators as it strives to be granted a full DLT provider license, and as it looks to operate on as a regulated provider in all territories, it currently has a presence in.
Nine regulatory principles
Gibraltar Financial Services Commission (GFSC) requires licensed firms to demonstrate it has adequate financial resources, IT systems, and controls to comply with anti-money laundering and terrorist financing rules. The in-principle decision it issues is an indication that the applicant complies with nine regulatory principles set out in Gibraltar’s DLT regulations.
Founded in 2013, CEX.io classifies itself as a self-regulated venue and is licensed as a Money Services Business (MSB) since the only regulation relevant to such businesses in the UK is a European Union law – the fifth Anti-Money Laundering Directive. When it started out, CEX.io wasn’t an exchange but a cloud mining platform.
In a statement released to the media, CEX.IO CEO Oleksandr Lutskevych said: “Gibraltar is one of the first crypto-friendly jurisdictions to license crypto-related businesses. We’re proud to be among the very few crypto platforms to meet regulatory standards and even surpass them. We interact with different regulators globally, and I find the GFSC approach one of the most thoughtful and relevant to dynamic crypto industries. This approach offers flexibility and opens room for healthy creativity and smart regulation.”