Liquid Exchange Taps Market License to Offer Crypto Derivatives in Japan

Digital currency trading platform Liquid Exchange has tapped the Japanese license that now qualifies it as a Type I Financial Instruments Business under the Financial Instruments and Exchange Act.

As announced by the exchange, the license was secured through its Japan-based subsidiary, QUOINE Corporation.

The trading firm says that it will expand its trading offerings in the Asian nation, with plans to launch crypto derivative products under the Financial Instruments and Exchange Act guidelines.

"The Type 1 license issuance is the culmination of a great deal of preparation and collaboration by the entire Liquid team. It is also a validation that trading derivatives in crypto can be done in a compliant manner with full customer protections & transparency," said Seth Melamed, Chief Operating Officer.

The application was officially filed back in Q2 2020, and it took the Japanese market regulator more than a year to grant Liquid its license. After crossing the hurdle, the trading platform says it aims to follow regional regulations in all of its future product offerings.

“As one of the first regulated exchanges in Japan in addition to being issued the Type 1 license, we deeply value compliance with laws and regulations to ensure that we continue to provide an environment where customers can trade cryptocurrencies safely and securely. We believe in the democratization of financial services through the innovation and services of the blockchain ecosystem,” the announcement reads.

Market participants have been agitating for the introduction of clear regulations to govern the digital currency ecosystem. The existence of rules will notably remove all sources of friction that can spur legal tussles as blockchain payments firm Ripple Labs is currently facing the United States Securities and Exchange Commission (SEC).

The crackdown on trading platforms over the past few years has pushed many to start exploring avenues to meet with regulator’s demands for registration.