ConsenSys Backed Nomisma Exchange Cleared by European Union to Trade Crypto Derivatives

Nomisma crypto exchange has become the first crypto derivatives platform to get a regulatory nod from the Liechtenstein Financial Market Authority to operate a blockchain-based Multilateral Trading Facility (MTF).

The exchange obtained a Markets in Financial Instruments Directive II license (MiFiD2), which would allow the exchange to offer crypto derivative products in the European market. The MiFiD2 license would allow the exchange to trade derivatives on digital assets, security tokens, payment tokens and utility tokens.

The MiFiD2 license offers a regulatory umbrella for trading infrastructure in the European Economic Area (EEA), EU member states and countries within the European Free Trade Association (EFTA). Any exchange offering its services to EU customers are required to obtain this license. The MiFiD2 license would also allow the exchange to operate in Kong and Singapore.

The first iteration for the MiFiD2 license was formalized back in 2007 which mainly revolved around stocks and traditional assets, however. The EU made amendments to the regulatory policy back in 2017 to include different asset classes as well. The newly formulated regulations aimed to cover the majority of the financial ecosystem with a focus on cost transparency and transaction record-keeping.

Dimitrios Kavvathas, Founder and executive chairman of Nomisma commented on obtaining an operation license saying:

“The license describes what financial instruments you are allowed to conduct trading in. In our case, they are derivatives on digital assets, including payment, utility and security tokens.”

Nomisma Exchange backed by SIG and ConsenSys

Nomisma Crypto derivative exchange obtained the operating license in late April and has obtained the backing of Susquehanna International Group (SIG) affiliate and ConsenSys, both of which have invested in the exchange in a different equity financing round. However, the exchange is not yet functional but plans to offer the trading features for tokenized assets which would also include digital asset derivatives.

ConsenSys’ former head of global business development, Andrew Keys, has been heavily involved in the project as he is not only one of the key investors in the exchange, but also works as a close advisor helping them navigate through the crypto ecosystem. Keys also cited three key reasons behind his avid interest in the project, namely:

  • Nomisma is the first MIFID2 compliant exchange in Europe for digital asset derivatives
  • Nomisma exchange has the ability to passport the license globally.
  • The architecture of the system, which allows the settlement of digital assets in a hybrid environment on and off-chain.

Although Nomisma has obtained regulatory clearance from the EU, the Financial Conduct Authority (FCA) has not cleared the exchange. The FCA is responsible for maintaining the details of regulated exchanges in the UK. However, the exchange’s founder assured users that their next target is to register with the UK's regulator.

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