The Bullish exchange has been granted a Distributed Ledger Technology (DLT) licence by the Gibraltar Financial Services Commission (GFSC).
The exchange has announced this in a press release.
The exchange will allow trading crypto with an advanced on-chain system of pairs with BTC, ETH and EOS. The release of the licence makes the launch date closer than ever:
— Bullish (@Bullish) November 9, 2021
The licence allows crypto and digital assets to be traded under strict regulation and compliant with the various AML (Anti-Money Laundering) regulations.
Gibraltar is one of the few countries to have introduced and prepared a dedicated legislative framework for companies wishing to operate with crypto and digital assets. This makes Gibraltar a popular destination for cryptocurrencies, according to Bullish chairman Brendan Blumer:
“As the world’s first jurisdiction to enact purpose-built legislation in support of DLT, we believe Gibraltar is becoming a leading blockchain and virtual assets hub, and that it can provide an environment for cryptocurrency-focused companies to operate securely and in compliance with industry best practices”.
In fact, thanks to this licence, not only is there a legislative backing to be able to operate nationally and internationally, but it also allows to already be compliant with most of the AML, KYC and tax laws and regulations that are required in almost every country, it could be argued that having this licence also makes it easier to pass other licences from other countries that similarly require the same information.
Bullish is certainly not the first to obtain such a licence. Other companies already have the same license, such as eToro, Huobi, Xapo, LMAX and others.
In the specific case of Bullish, it is a DLT Provider – CAT 3 license, which allows:
- to operate in the secondary market for trading virtual assets;
- to provide services for leverage trading.
- to provide custody services.
Gibraltar’s crypto regulation
But what exactly is this DLT framework in Gibraltar?
It was put in place and activated in January 2018. It requires any company that operates with DLTs whether by way of custody or transfer, inside or outside Gibraltar, to have a DLT licence issued by the GFSC as a DLT provider.
This framework is based on 9 fundamental principles that companies must comply with:
- A DLT provider must conduct its business with honesty and integrity;
- A DLT provider must safeguard the interests and needs of all its users and communicate with them fairly, clearly and without deception;
- A DLT provider must maintain and have adequate financial and other resources;
- A DLT provider must actively manage and control its business, conduct it with skill, care and diligence, and have regard to the risk of the business and its customers;
- A DLT provider must have adequate means for the protection of clients’ assets and is accountable to them;
- A DLT provider must have an adequate internal governance structure;
- A DLT provider must ensure that all its systems and access to them are maintained by high standards of security;
- A DLT provider must have systems in place to prevent, detect and uncover risks of financial crimes such as money laundering and terrorist financing;
- A DLT provider must be resilient and develop a contingency plan to be able to recover in cases of business distress.
It is also worth mentioning that Gibraltar’s crypto regulation has been updated, as of 22 March 2021, with FATF (Financial Action Task Force) rules so that it also integrates the regulation on asset management and DLT providers.
What is the Bullish exchange?
The Bullish hybrid exchange will start with a lot of funds and liquidity:
- over 160k BTC,
- 20 million EOS (mostly from the EOS ICO)
- about 300 million dollars from various investments.
At a technical level, the exchange has a classic interface with the part of the orders that will have different pairs including BTC, ETH and EOS, then there is the part of the liquidity pool where users can participate in the liquidity and get a percentage of the fees plus an interesting APR that during testing has touched double-digit values.
All this will take place autonomously, albeit within the platform. We are in the presence of a regulated decentralized finance platform, as it is necessary to go through a KYC process to access the exchange.
Given the enormous liquidity of the exchange itself, it is an interesting platform for institutional investors who need to move millions of dollars in a regulated manner. Bullish allows this target audience to experiment with decentralized finance.
In fact, it’s easy to imagine a scenario where an institutional investor or user can buy any asset they want like BTC, ETH or EOS and then put it into a liquidity pool, locking up their asset and taking it off the market to get fees and an attractive APR, all with minimal effort and a remarkable return because the advantage is double.
Bullish will go public thanks to the combination of Far Peak Acquisition Corporation (FPAC), a company promoted by Far Peak LLC which is led by Thomas W. Farley, former chairman of the New York Stock Exchange (NYSE).