Digital asset services firm Bequant has secured two “in principle” approvals in Malta that will ultimately lead the company to become a licensed prime broker and cryptocurrency exchange operating in Europe.
A new prime broker in Europe
“The prime brokerage offering has been our go-to product since we launched the project,” Bequant CEO George Zarya said in an interview. “We have adapted it to quants, prop traders and arbitrageurs who are prime broker clients.
Prime brokers minimize counterparty risk on exchanges and enable a high level of capital efficiency ". After Coinbase acquired cryptocurrency broker Tagomi in May, it was able to facilitate at least $ 425 million worth of MicroStrategy's bitcoin purchases through its service. Bitcoin system.
This is what is at stake for the creation of a prime brokerage section in a period of greater institutional interest. Prime brokers are facilitators for financing and trading for institutional investors who move large sums of money.
While the digital assets space doesn't currently have many prime broker options, several cryptocurrency firms including Coinbase, BitGo, and Genesis Trading have announced their plans to build a prime brokerage section this year.
Bequant's core services include capital introduction, fund administration, securities lending, direct multi-exchange market access, custody, collateral management, leveraged trading, over-the-counter block trading, risk management and planning intelligent ordering.
A license that paves the way for many more
Since the end of August 2018, the company has operated its prime brokerage and cryptocurrency exchange services provisionally under the Virtual Financial Assets Act while it had a close conversation going on with the Malta Financial Services Authority (MFSA), it said. Zarya.
The licenses will allow Bequant to continue operating its cryptocurrency exchange and offer prime brokerage services to its clients. In total, both approvals required Bequant to hold € 730.000 in reserve and have policies and procedures reviewed by the Malta Financial Services Authority, Zarya added.
Passing this rigor will allow Bequant to apply for more securities licenses in Malta with relative ease in the future, Zarya said, potentially allowing the company to manage tokenized securities and derivatives.
“The prime brokerage product has been our staple since we launched it,” said Zarya. "In the new year, the main milestone for the industry will be greater control over exchanges by customers as the market becomes more institutional." The company is now linked to 14 exchanges and five OTC branches as sources of liquidity, compared to the 11 sources it had in August.
