CoinZoom — the next generation cryptocurrency exchange from the founders of Forex (FX) giant Interbank FX — has announced the approval of its Money Transmitter License in Texas, complementing its ballooning list of regulatory compliance certificates in multiple countries.
CoinZoom’s familiarity with legacy regulatory structures has enabled the exchange startup to accumulate Money Service Business registrations in all 50 US states, with Texas becoming the 46th state in its Money Transmitter lineup, following on the heels of Virginia last month.
Outside of the US, CoinZoom has also been granted a Digital Currency Exchange License from Australian authorities, and is compliant with EU registration in Ireland, under its subsidiary — CoinZoom Europe, Limited.
Leveraging its retinue of past FX relationships with financial institutions, liquidity providers, and OTC desks, CoinZoom has surfaced to the forefront of an emerging wave of cryptocurrency exchanges that are transitioning from conventional financial markets to the inchoate cryptocurrency sector.
A Breath of Fresh Air
The “Dark Underbelly of Cryptocurrency Markets” articulates the tenuous and murky regulatory relationship between exchanges, ICO issuers, and coin aggregation sites that reached a pinnacle during the ICO craze of 2017. Widely recognized by industry residents, the triad’s relationship often exposed new retail investors to significant risk, hidden beneath layers of complexity.
Liquidity was at the core of the dynamic, with exchanges propping up volumes to have the appearance of more liquid trading pairs than they actually did.
The insights into the extent of the quandary came to a head earlier this year when Bitwise unleashed a damning report to the SEC in March claiming as much as 95 percent of cryptocurrency exchange volumes were fake. Since then, exchanges have made significant efforts to crack down on wash trading practices, particularly top exchanges, as indicated by a recent analysis from TokenInsight.
However, the market microstructure is still nascent, and the ability of malicious actors to wield large momentum shifts in price through the auto-liquidation of leveraged futures contracts, triggering a cascade of price movements on spot markets in a specific direction, is still a cause for concern for regulators. For example, Bitwise’s latest ETF proposal was shot down by the SEC again citing immature market infrastructure, the EU is expected to roll out stricter crypto regulations soon, and the UK is contemplating an outright ban on crypto derivatives for retail investors.
Wary regulators are seeking more familiar compliance and regulatory structures for the crypto sector, which has been a mixed bag of antagonism and openness to further regulations. And that’s precisely where CoinZoom is betting on its advantage.
Catering to financial institutions and retail investors that want more nuanced products and instruments, CoinZoom is seeking to disrupt a market by bridging the gap between crypto and legacy finance.
For retail investors and institutions, CoinZoom breathes fresh air into the market with a tenure of experience in FX markets, the most liquid and high-frequency market in finance.
For example, institutions and retail can be assured that CoinZoom is actually liquid, drawing from both its regulatory status and a laundry list of over 30 institutional, market makers, and OTC liquidity providers. The CoinZoom team, led by Founder and CEO Todd Crosland, has ported their experience from legacy markets to crypto — with some enticing products for users of its exchange.
Beyond the regulatory path that CoinZoom is on, the exchange is gearing up for its launch before the end of the year, which will encompass a collection of stablecoins, a VISA debit card connected to user accounts, and staking services for passive income.
Texas is the most recent addition to CoinZoom’s regulatory belt, and it appears that it won’t be the last either. Preparing for its official launch, CoinZoom, and the broader trend of the convergence between legacy finance and crypto is setting the scene for what is sure to be an eventful 2019.