Swarm Markets has launched its regulated decentralised trading exchange (DEX) to the general public as the total value locked in DeFi platforms has swelled to almost $90 billion.
Regulators across the globe have begun to crackdown on unlicensed crypto platforms and that’s where lies Swarm Markets’ edge.
The firm operates under regulatory license from the Federal Financial Supervisory Authority (BaFin) in Germany, provided to Swarm Capital GmbH Branch Office Berlin, and is supported by Swarm Markets GmbH (together “Swarm Markets”).
The exchange claims to be the first unified platform where both retail and institutional investors will be able to trade securities alongside crypto.
Philipp Pieper, Co-founder of Swarm Markets, commented: “Swarm Markets is skating to where the puck is heading by having regulatory authorisation from a globally-recognised regulator from the outset. BaFin has been extremely forward leaning and provided clarity on how it will govern DeFi, giving entrepreneurs confidence that will allow a healthy market to develop with a regulatory approach.
“We have the privilege of working with some of the most progressive legal minds in the crypto space and have been engaging in an ongoing dialogue with BaFin for the past two years, interpreting securities laws and applying them to assets on the Blockchain.
“Regulators are starting to see the benefits of integrating traditional markets with blockchain technology, namely the transparency of transactions so regulators can lift the hood themselves and see what is happening in real time, reducing their reliance on companies reporting to them.”
Swarm Markets has set up compliant know-your-customer (KYC) and anti-money laundering (AML) protocols as required by the financial watchdog. This removes counterparty risk for users and speeds up adoption of new types of market participants and assets to DeFi.
The exchange is welcoming early adopters with rewards for adding liquidity and trading. Rewards are paid out weekly and boosts are available for users who hold SMT, the Swarm Markets payment token.
The DEX also reimburses gas fees on all transactions involving trading and adding liquidity and users can enjoy networked liquidity with self-custody.
Timo Lehes, co-founder of Swarm Markets, commented: “The opening of Swarm Markets is a historic step to move corporate cryptocurrency trading out of its legal grey area and offers sophisticated institutional investors and their clients the full scope of benefits from trading digital assets, including the high APYs attendant to DeFi, for the very first time.
“There are several layers of uncertainty that need to be addressed with regulation in order to build trust. More than just a DEX with KYC, our regulatory status means we can onboard new assets and participants into the DeFi ecosystem that others cannot. We believe assets on the Blockchain can be regulated to provide the same consumer protections as in traditional finance without sacrificing the benefits of innovation.
“Our goal is to integrate traditional markets with Blockchain technology. Not only can existing market infrastructure be replicated on the Blockchain with greater efficiencies, but this technology will enable traders and asset holders to do more and have greater autonomy over the markets they want to participate in.”
The venue has already listed Ethereum, Wrapped Bitcoin, SMT, DAI and USDC on the platform and plans to add new types of assets in the near future.
Nearly 2,000 people have registered for the exchange’s liquidity provider programme, pledging over $100 million in aggregated assets.