Galaxy Digital Eyes UK Crypto ETP, But Wants Regulation First

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Galaxy Digital wants to launch a crypto-focused exchange-traded product in London, but the lack of regulation of digital assets in the UK has so far held it back.

In an interview with Financial News, Galaxys Emea chief Tim Grant said the company had had constructive discussions with the Treasury and the Financial Conduct Authority about UK crypto laws.

We want that to turn into a policy change that then allows us to do certain things like, for example, an ETP in the UK. It would be amazing. Right now you can’t.

The comments on the subsidies come after the European Union passed its landmark regulation on crypto-asset markets, the first such far-reaching legislation in such a large financial bloc.

The bill, which was ratified in a vote on April 20, comes as the UK Treasury nears the end of its consultation on a draft regulation on April 30, although City Minister Andrew Griffith , said earlier this year that the UK would not pass new laws to regulate the cryptocurrency industry. until at least 2024.

READEU’s landmark crypto rulebook to lobby UK and US regulators

While some market participants have launched ETPs that track the price of assets like bitcoin in the UK, this has proven difficult due to a lack of clear digital asset rules.

In 2021, crypto derivatives firm ETC Group launched a bitcoin ETP on Aquis. ETC Group said at the time that it had considered going to the biggest London Stock Exchange but had hit a regulatory brick wall as LCH, the LSE’s clearing house, did not did not accept cryptographic products.

Last week, the LSE announced plans to begin clearing crypto derivatives through the Paris branch of LCH as part of a thaw in its previously frosty stance on digital assets.

But even for ETC Group, the majority of its products are still traded on German, Swiss or European exchanges. It recently announced a new ETP that would be listed on Deutsche Brse XETRA in Germany, and has not launched another UK-based product since the first in 2021, according to its website.

Speaking on a Barrons Live podcast with FN, Grant said MiCA had cast a shadow over watchdogs in other jurisdictions such as the UK and the US, which are now at lagging behind in regulation.

The UK really needs to catch up now. They’ve been saying the right thing for about a year when Rishi [Sunak]when he was Chancellor said: We want to be a crypto hub.

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There is a reason why the derivatives market is largest in London and the foreign exchange market is based in London. It’s great for the talent and its central position from a global time zone perspective. Why wouldn’t this be the case for crypto?

There is a huge opportunity but [with MiCA] Europe has shown the way.

It comes after FN revealed that Galaxy Digital is considering a new UK-based investment banking team for crypto-focused deals.

Michael Ashe, head of investment banking at Galaxy, said the firm was aiming to bolster its trading and advisory capabilities in London over the coming months, including hiring a senior executive to lead the unit.

To contact the author of this story with comments or news, email Alex Daniel

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