Joshua Barraclough, founder and chief executive at One Trading

This latest round saw existing investor MiddleGame Ventures increase its stake in One Trading, while Valar and SpeedInvest also participated.

The terms of the deal were not disclosed.

“As a major, multinational bank with a commitment to innovation, SC Ventures is dedicated to driving digital assets market infrastructure,” said Joshua Barraclough, founder and chief executive at One Trading.

“We welcome them as an investor in the company and believe they can add a lot of value to One Trading and our clients.”

The investment will be used by One Trading to support the launch of the first crypto perpetual futures in the EU as a Mifid II trading venue.

In July, the Dutch financial market regulator granted One Trading an Organised Trading Facility (OTF) license, establishing the exchange as a Mifid II trading venue. 

Having gained OTF License approval, One Trading is the only crypto perpetual futures trading venue in the EU and the first cash-settled perpetuals platform in Europe, including the UK.

The trading venue is also the first regulated derivatives exchange in Europe which will be accessible to retail clients. 

“Financial innovation should not come at the cost of consumer protection, that’s why we are glad to see One Trading receiving the OTF License. We congratulate the team on becoming the first Mifid II trading venue for crypto perpetual futures in the EU,” said Alex Manson, chief executive at SC Ventures. 

“We look forward to One Trading providing much needed infrastructure to all participants in the EU and further afield.”

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The move builds upon the launch of FTSE Bitcoin index futures and options last year, falling in line with Eurex’s goal to offer secure access to cryptocurrencies in a regulated market environment.

Read more: Eurex becomes first European exchange to launch Bitcoin index futures

According to the exchange, there is significant trading and hedging demand from institutional and professional customers for Ethereum, as reflected in record trading volumes in derivatives and other investment products.

“We look forward to expanding our offering in crypto derivatives together with FTSE Russell and Digital Asset Research for our clients,” said Randolf Roth, member of the Eurex executive board.

“As one of the world’s leading CCPs Eurex offers trading on a regulated exchange and is therefore the right partner to enter the crypto space for institutional clients.”

The new options and futures are listed in EUR and USD, with the respective FTSE Ethereum index as the underlying. The contract size is equivalent to 10 Ether, which is approximately $35,000.

Both of the contracts are cash settled and expire on the last Friday of each month. Monthly and quarterly maturities will be available, alongside weekly expiring contracts for options.

“We are delighted to support the expansions of Eurex’s digital assets ecosystem with the offering of futures and options on the FTSE Ethereum index,” said Kristen Mierzwa, head of digital assets at FTSE Russell, an LSEG business.

“In association with the experts at Digital Asset Research we have established an industry standard for assessing underlying digital asset and exchange inclusion. We have applied this vetting methodology to offer indices reflective of the real investable market.”

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The agreement, which aims to move beyond cryptocurrencies and bitcoin, will see the two firms provide investors with access to the $2.4 trillion digital asset landscape through manager-directed strategies.

“We believe that the digital assets landscape is so much more than the single crypto components and that crypto native companies are best equipped to understand that ecosystem and its correlation with financial markets,” said Anna Paglia, chief business officer at State Street Global Advisors.

“We are pleased to be working with Galaxy to educate investors about the role digital assets can play in a diversified portfolio and provide the opportunity to participate in the next level of growth and innovation for the digital asset ecosystem.”

With growing interest in digital assets from both institutional and retail traders as a result of spot bitcoin ETFs, investors are also seeking exposure to the asset class through investment options beyond pure spot bitcoin.

The two firms stated that they believe this is where the next level of growth is for the digital asset ecosystem.

Read more: Digital assets and traditional finance: Can two parallel lanes converge?

“Since Galaxy was founded, active management across the full ecosystem of digital assets and crypto companies has been a core competency,” said Steve Kurz, global head of asset management at Galaxy.

“By partnering with State Street Global Advisors and utilising our combined expertise, we believe we are in a strong position to make digital assets more accessible to the broader investment community through the creation of new ETFs offering exposure to digital assets.”

According to a statement, the expectation is that State Street Bank and Trust would provide administrative and accounting services for the new digital assets ETFs that State Street Global Advisors and Galaxy jointly develop pursuant to this collaboration.

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The new development builds on an existing relationship between the two firms, leveraging their combined expertise to develop new derivatives products. This could potentially start with cash-settled index options tied to the FTSE Bitcoin Index and the FTSE Ethereum Index.

As part of the collaboration, Cboe plans to list cash-settled index options on FTSE’s indices – subject to regulatory approvals – which will target increased investor demand for exchange-traded derivatives to manage crypto exposure in a US-regulated trading environment.

“Our expanded relationship today mirrors that successful model of collaboration, combining Cboe’s unrivalled derivatives expertise with FTSE’s world-class indexing capabilities to potentially bring new solutions to the digital assets space,” said Catherine Clay, global head of derivatives at Cboe.

“[…] As these two asset classes converge, we look forward to driving continued innovation and our relationship with FTSE Russell will be key to this strategy.”

The FTSE Bitcoin Index and FTSE Ethereum Index are part of the FTSE Digital Asset Indices series, developed in partnership with Digital Asset Research (DAR).

These indices capture the performance of bitcoin and ether, as determined by the FTSE DAR Reference Price, offering exposure to the digital asset market.

“We are delighted to continue working alongside Cboe Global Markets, realising our mutual commitment to enable new asset innovation in financial markets,” said Fiona Bassett, chief executive of FTSE Russell.

“Our indices are used by some of the largest crypto asset managers in the world for their best-in-class data and processes built to manage regulatory and trading risk – critical differentiators for the data in this asset class.”

Cboe added in a statement that it plans to share more details about its intentions for cash-settled index options on the FTSE Bitcoin Index and the FTSE Ethereum Index potentially later this year.

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The principles, named the Digital Asset Securities Control Principles (DASCP), are intended to serve as a guide for firms navigating the challenges posed by distributed ledger technology (DLT).  

The DASCP framework covers various value chain activities, including issuance, clearing, settlement, custody, and asset servicing. The guidelines currently exclude secondary trading activities.  

Designed to be asset class and technology-neutral, the DASCP does not advocate for any particular DLT architecture – be it public, private, permissioned, or public permissioned. The report stated that this ensures its applicability across various DLT platforms without endorsing specific third-party solutions. 

In a joint letter, the CEOs of the three organisations said: “Ultimately, we believe that industry collaboration is not only the most expedient way but also the most effective way to build a robust global digital assets ecosystem. We invite you to join us in this exciting journey that has the potential to redefine global finance, ensuring that this digital transformation benefits the ecosystem and contributes to sustainable economic growth.” 

The trio said this whitepaper marks the beginning of a more expansive programme, with the DASCP serving as a baseline for propelling the industry towards digital asset standards. Over 20 market participants participated in testing the DASCP, while all industry stakeholders have been invited to engage with and help evolve the framework moving forward.  

The letter continued: “The DASCP marks the starting point of further industrywide engagement to enable standardisation, drive adoption and unlock value. To achieve these goals, we intend to put these principles into action. By leveraging them in our digital asset activities, we will effectively demonstrate to clients, regulators, and the broader industry that digital asset securities can be just as safe and secure as traditional assets.” 

The whitepaper outlined three strategic priorities for establishing industry standards: forging a common language, enabling regulatory clarity, and providing a blueprint from industry-wide alignment.  

A series of in-depth discussions involving market participants will now follow the whitepaper, with a view to fostering open dialogue and collective intelligence – addressing the concerns and challenges faced by the industry in implementing the control principles.  

“Integrating these principles into future standards will be vital for enhancing security, efficiency, and promoting broad-based innovation within the industry,” the report said. “We are committed to not just working together but to moving forward with a purpose. This is a call for industry-wide mobilisation to support a vision. Let us unite in this endeavour to build a robust, integrated financial future. Together, we can advance the era of digital asset securities.” 

The whitepaper comes as the development of digital asset and tokenised solutions is really beginning to pick up pace in the industry. While widespread adoption may still be a long way off, participants from across the market are establishing dedicated units and testing potential use cases for the technology.  

The concern, however, is that innovation is taking place in silos, therefore the industry is looking to initiatives and market infrastructure providers – orutilities – to solve for this issue through standards and interoperability endeavours. 

For the market infrastructures themselves, questions have arisen around their role in a digital future – whereby new technologies have the potential to cut out parts of their role – and they are therefore looking to evolve and establish their place in the securities industry of the years to come. 

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The new offering will allow crypto trading firms, exchanges and brokers to access a broad range of currency pairs, including major currencies such as USD, EUR, GBP, CAD, MXN and CHF, which FalconX stated will mirror the traditional FX market experience.

The desk aims to provide enhanced security and improve capital efficiency by modernising fiat transactions to match the speed of crypto markets.

The new global team will be under the leadership of Ben Sebley, Richard Usher and Lux Thiagarajah.

Selbey will operate as general manager of FX, while Usher and Thiagarajah both join the FalconX team from BCB Group. While at BCB Group, Usher most recently served as head of OTC trading, while Thiagarajah most recently held the position of chief revenue officer.

“I know this has taken a while and some of you might have even thought that I slipped into the bear market abyss, but I’ve actually been rather busy. I’m delighted to finally announce that we have officially launched FX at FalconX! […] This is going to solve a lot of issues for a lot of clients,” Sebley said in a social media post.

The new offering will also leverage FalconX’s middle- and back-office infrastructure and balance sheet, alongside establishing new fiat on and off ramps to serve fast-growing frontier markets.

Elsewhere, the new desk will enhance the movement of funds between traditional currency pairs such as Euros and Sterling through same-day settlement.

‍“For our clients, this will offer fiat access along with high-quality service that has historically been difficult to navigate. Our desk will offer deep liquidity in multiple currencies for a wide range of clients, expanding our current product offering,” FalconX said in a statement.

“For retail aggregators and brokers operating in the crypto market or looking to launch crypto solutions, the new desk offers a low-cost solution for smaller-sized tickets, across multiple currency pairs, in high volume.”

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Swissquote Exchange (SQX) is a central limit order book (CLOB) which offers liquidity alongside an environment to trade cryptocurrencies to a wide range of market participants.

Users are able to trade, hold, and transfer crypto assets in their Swissquote account, backed by the security associated with a regulated Swiss bank.

Since launching in October 2022, SQX has expanded its offerings to include more than 40 cryptocurrencies.

According to the firm, B2C2 provides liquidity across market conditions, and offers bid ask spreads which enable traders to execute trades with minimal price impact as well as efficient settlement and improved capital efficiency through appropriate credit offerings.

“SQX has proven itself as the biggest and strongest digital assets exchange in Switzerland leading with greater liquidity and faster execution for our customers, strengthening our position as a recognised leader in crypto trading,” said Jan De Schepper, chief sales and marketing officer at Swissquote. 

“We are delighted to have B2C2 as a strategic partner at our side. Together, we are committed to providing superior execution, enhanced transparency and an even better overall trading experience.”

The collaboration between SGX and B2C2 seeks to help create a robust, liquid, and attractive marketplace in digital assets for institutional investors and other market participants, which can ultimately increase trading activity and improving operational efficiency.

The addition of B2C2 on SGX will expand the liquidity available to traders, while SGX will link new market participants to B2C2’s trading ecosystem.

“We are pleased to deepen liquidity on the SQX exchange, providing clients with enhanced trading opportunities and reinforcing our competitive edge in the industry. Together, we are poised to unlock new growth avenues through liquidity solutions,” said Thomas Restout, group chief executive of B2C2.

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The development marks a milestone for the regulation of digital assets, given that beforehand, derivatives reporting solely focused on traditional financial instruments.

The DTI has been introduced as an underlier to two derivative identifiers. Namely, the Unique Product Identifier (UPI) and the International Securities Identification Number for OTC derivatives (OTC ISIN).

The UPI is a G20 mandated identifier for derivatives reporting, helping regulators identify the build-up of systemic risks in OTC derivatives markets globally and the OTC ISIN, an identifier used to detect and investigate market abuse.

Including DTIs as underliers to both the UPI and the OTC ISIN will allow for greater transparency in the crypto derivative trading market, supporting public authorities in identifying digital asset risk globally, according to the DTIF.

Adopting the ISO 24165 DTI standard also emphasises the regulatory commitment to establishing a globally recognised identification standard for the developing market of crypto-asset-referenced financial instruments.

As of 29 April this year, crypto-derivatives falling under the EU’s European Market Infrastructure Regulation (Emir) need to use a DTI as an underlier to the UPIs and OTC ISINs reported to a trade repository. The use of DTI allows EU watchdogs to extend the monitoring of derivative risk to digital assets.

This expansion of the DTI scope will allow for more efficient reporting and identification of digital asset underliers for derivative products. The DTI list is expected to grow to allow for increased scalability and flexibility for UPI and OTC ISIN generation in the long run.

DTIF’s Sassan Danesh, said: “This marks the successful launch of the DTI in the EU for monitoring of crypto-derivative risk.

 Looking forward, we are extending the use of the DTI across the G20 jurisdictions, including in the UK, Australia and Singapore later in 2024 and Japan in early 2025.”

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Clearing services will be provided through LCH SA’s new dedicated service, LCH DigitalAssetClear, for these contracts traded on the UK FCA regulated digital asset derivatives trading venue, GFO-X.

LCH SA stated that the offering has been developed with GFO-X in close consultation with market participants to ensure digital asset derivatives are traded and cleared through a service this is secure, highly regulated and focused on digital asset derivatives.

LCH DigitalAssetClear is underpinned by a segregated default fund, a unique risk management model and dedicated set of clearing rules.

LCH SA added that it is currently engaged with general clearing members, with plans to launch the clearing service later this year.

“We are pleased to have received regulatory approval to launch this innovative service which will enable institutional market participants to trade and clear cash-settled Bitcoin index futures and options within a regulated environment they are familiar with and which will allow them to benefit from LCH SA’s proven risk management capabilities,” said Corentine Poilvet-Clédière, chief executive at LCH SA.

“LCH SA is excited to be working with GFO-X, together with the industry, to provide a regulated marketplace for this asset class as we look to expand our services as a truly international clearing house.”

The new cash-settled Bitcoin index futures and options contracts will be cleared through LCH DigitalAssetClear and will be based on the GFO-X/Coin Metrics Single Asset Real-Time Bitcoin Index (GFOXBR).

The development will allow firms to trade futures and options on the Bitcoin reference index directly.

LCH DigitalAssetClear will operate a fully segregated clearing service, including a segregated default fund and a dedicated set of clearing rules, for market participants clearing these instruments.

Members and clients using LCH DigitalAssetClear will also be able to leverage LCH SA’s risk mitigation, settlement, netting and margin efficiencies with a regulated environment.

“LCH DigitalAssetClear’s regulatory approval is a significant step in delivering a dedicated trading and clearing services targeted towards institutional adoption of this growing asset class,” said Arnab Sen, chief executive at GFO-X.

“Banks and institutional have been clear as to their demands for accessing this market and our joint solution delivers on their requirements.”

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These first rules regarding crypto asset service providers (CASP) are aimed at “[fostering] clarity and predictability,” as well as “[promoting] fair competition between crypto-asset service providers and a safer environment for investors across the Union”.

The proposals cover what information will be required to authorise a CASP and when financial entities notify intent to provide these services. 

Further, the ESMA report includes what information will be required when it comes to instances of acquisitions of a qualifying holding in a CASP, and also how CASPs should address complaints.

Depending on feedback from the EC following submission of the report, ESMA confirmed that they would move to provide further advice and technical guidance in the area if required by the commission.

Read more: Evolving regulation expected to push crypto derivatives trading volumes onshore

MiCA covers crypto-assets that are not regulated by existing financial services legislation, based on the principle of passporting, requiring operators in the space to obtain a single licence to provide crypto-asset services across member states of the European Union.

Set to take effect this year, the regulation, developed by the EU, came off the back of a lack of uniform rules around the asset class despite the market seeing increased demand for crypto products. The goal is for a comprehensive regulators framework which effectively reflects the nuanced scope of trading in digital assets. 

Also this week, ESMA has launched its third, and final, consultation package under MiCA. Specifically, the watchdog is seeking input on the proposed rules and guidelines across four areas: detection and reporting of suspected market abuse in crypto-assets, policies and procedures for crypto-asset transfer services, suitability requirements for certain crypto-asset services and portfolio management formats, and ICT operational resilience for certain entities under MiCA.

Read more: ESMA publishes first consultation on Markets in Crypto-Assets regulation

Feedback to the consultation is required before 25 June 2024, with a final report based on the feedback set to be submitted to the European Commission for endorsement by 30 December at the latest. 

Speaking during the launch of the first consultation package, ESMA explained: “We are determined to ensure entities involved in crypto-asset related activities understand that the EU is not a place for forum-shopping. We also want to remind consumers that, even with the implementation of MiCA, there will be no such thing as a safe crypto-asset.” 

Earlier this year, in January, the regulator released a specific consultation paper seeking feedback from the market on the classification of crypto assets under MiCA.  

Through this initiative, the regulator is aiming to facilitate consistency across the European Union by bridging the gap between MiCA regulation and Mifid II.

According to ESMA: “The proposed guidelines aim at providing national competent authorities (NCAs) and market participants with structured but flexible conditions and criteria […] to do so, the draft strikes a balance between providing guidance and avoiding establishing a one-size-fits-all approach.” 

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