Dutch ETF Trader Moves into Crypto Despite Disapproval From Regulators
Flow Traders, the largest European exchange fund trader has decided to enter the Crypto Market. This Amsterdam based ETF Trader is focusing on Bitcoin and Ether based Exchange Traded Notes(ETN). According to the Swedish XBT Provider(issuer of ETN), Flow Traders has ‘dramatically increased its trading in cryptocurrency over the past few months.
ETNS are compared to investing in bonds and are viewed by many analysts as the next revolution in the area of institutional investment in cryptocurrency.
Bloomberg identified Flow Traders as the first trading firm in the world to publicly acknowledge that it is trading in ETNs on a regulated exchange. Dennis Dijkstra, the co CEO of flow traders said in a positive statement
“People underestimate crypto. It’s big, and it is to be regulated very soon. The market participants are much more professional than people think. Institutional investors are interested – we know they are because we get requests.”
However, Flow Traders made this move despite disapproval from its own regulators. The Dutch Authority for the Financial Markets (AFM). The authority continues to remain opposed to entry in the crypto market. Nienke Torensma, an AFM spokesperson said,
“We discourage activities in cryptos both by consumers and professional license holders. By virtue of its newness and the anonymity it potentially offers, it is very prone to abuse. Given its inability to serve the promised purpose as a currency, we don’t regard it to be an asset class.”
This is not a rule or regulation but an opinion of the Authority and therefore Flow Traders can continue buying and selling ETNs. However, this opinion is held by a lot of regulators and governments around the world as they fear its abuse mainly in the form of funding and assisting criminals and terrorism. Similar to regulators around the world, AFM is also interested in an international agreement on Cryptocurrency to regulate it on a global level.
Flow Traders is going along with the trend of a lot of banks entering the cryptocurrency market. For example, Goldman Sachs is setting up a digital currency desk and Coinbase was given a UK E money license and an agreement with Barclays.
As long as there are no regulations by AFM, Flow Traders can continue its trading in cryptocurrency. However, with AFM’s skepticism, it is important to keep a watch on for how long will there be a lack of regulation.
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