Omega launches dark pool crypto exchange
Omega Dark will become Bermuda's first licensed cryptocurrency exchange.
David Burt, the Premier, announced this month in the House of Assembly, that the exchange's parent company, Omega One was to receive its digital asset business licence. The company has since become the first to be listed in this category by the Bermuda Monetary Authority.
Omega Dark will be “the first regulated, fully independent, and institutionally focused dark pool in the digital asset marketplace”, according to a release from the company.
The dark pool is the description given to a private area of the trading marketplace where institutions can trade large blocks of assets privately, without having the large impact on prices that such a trade could have on public exchanges.
The name “dark pool” comes from the lack of transparency of these private areas of the financial market.
Omega said in a statement: “The advent of an institutional-grade dark pool in digital assets could be a game-changer for existing cryptocurrencies like bitcoin, while setting the stage for the transformation of stocks, bonds and real estate into digital assets.”
Omega Dark is accepting applications to its early access programme and has been partnering with liquidity providers, hedge funds, trading desks, execution platforms, exchanges, and market makers who are trading a minimum of $10 million in monthly volume, starting with the bitcoin to US dollar spot market.
The statement did not mention the location of any offices or staffing plans.
Last year, the New York-based company pledged to open an office on the island and hire at least 20 Bermudians over a three-year period in a memorandum of understanding signed with the Bermuda Government.
Omega One's team is led by Alex Gordon-Brander, who designed a bond trading platform at MarketAxess and a platform for foreign currency exchange trading by hedge funds at Bridgewater Associates.
The company's regulatory team includes Bart Chilton, former commissioner of the US Commodities Futures Trading Commission and Jeff Abramczyk, former chief regulatory officer at Pershing.
The company said Omega Dark would open the digital asset markets to “an entire new class of participants”.
“Dark pools matter so much for crypto because they act as a central warehouse for liquidity, and connect the broad array of fragmented exchanges and over-the-counter desks across the globe into a single hub,” Mr Gordon-Brander said.
“In turn, Omega Dark allows participants to cheaply and discreetly balance liquidity against each other and against market makers and hedge funds, creating a win-win for everyone.
“We believe our platform brings dark pools into the light by leveraging the blockchain to prevent unfair activity and market manipulation.
“We're very proud to have worked so closely with the Bermuda Monetary Authority — the first in our multi-jurisdiction regulatory strategy — to create a trading venue that can make the global crypto markets safe and efficient for everyone.”
The company's statement quoted David Burt as saying: “We are following the same strategy with digital assets as we did for reinsurance, and recognise that the best businesses need a high standard but progressive environment in which to thrive.
“In crafting our regulations we paid particular attention to the need for the industry to maintain a very high standard of KYC/AML [know your customer/anti money-laundering] compliance as well as the need for high standards around cybersecurity and custody risks.
“Bermuda is not an easy jurisdiction to get into, and after more than a year of engaging with the Government and the Bermuda Monetary Authority, Omega One is the first company to cross that high bar.”
Mr Chilton added: “When I was a CFTC commissioner, one of our primary concerns was ensuring a fair marketplace for all participants.
“Omega One has achieved this standard by offering transparent pricing of liquidity preference within a robust regulatory regime. This platform will give greater confidence to the markets, leading to more liquidity, less volatility, and better price discovery.”
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