Saturday, November 27 2021

Digital asset servicing firm Bequant has secured two ‘in principle’ approvals in Malta, which will ultimately lead the company to become a licensed prime broker and crypto exchange in Europe.

“The prime brokerage offering has been our flagship product since we launched it,” said George Zarya, CEO of Bequant, in an interview. “We have adapted it to quants, prop traders and arbitrageurs who are clients of prime brokers. Prime brokers minimize the counterparty risk on the stock exchanges and allow a high level of capital efficiency.

After Coinbase acquired the leading crypto broker Tagomi in May, it was able to facilitate the purchase of at least $ 425 million of successful bitcoin from MicroStrategy through its Coinbase Prime service. These are the challenges of setting up a prime brokerage branch at a time of rising institutional interest.

Prime Brokers are financing and trading facilitators for institutional investors with deep pockets. While the digital asset space currently doesn’t have a lot of prime brokerage options, several crypto companies, including Coinbase, BitGo, and Genesis Trading, have announced plans to create prime brokerage wings this year.

Bequant’s prime brokerage services include introduction of capital, administration of funds, securities lending, direct access to the multi-stock exchange market, custody, management of collateral, execution of effect transactions. leverage, OTC block trading, risk management and intelligent order routing.

As of the end of August 2018, the company has been provisionally operating its principal brokerage and cryptocurrency exchange services under the Virtual Financial Assets Act while in close conversation with the Malta Financial Services Authority (MFSA), said Zarya.

The licenses will allow Bequant to continue operating its crypto exchange and offer prime brokerage services to its clients.

In total, the two approvals required Bequant to hold € 730,000 in reserve and to have policies and procedures reviewed by the Malta Financial Services Authority, Zarya added.

Having gone through this rigor already will allow Bequant to apply for further securities licenses in Malta with relative ease in the future, Zarya said, potentially allowing the company to manage tokenized securities and derivatives. .

“The premier brokerage product has been our anchor since we launched it,” said Zarya. “In the new year, the major step for the industry will be an in-depth review of trade by customers as the market becomes more institutional.”

The company is now connected to 14 exchanges and five over-the-counter outlets as sources of liquidity, up from 11 sources in August.


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