In the second part of our three-part series on crypto-exchanges, we described the central challenges and problems that the exchange markets are currently facing. We then described the “Blockchain Island” Malta as an attractive location where crypto exchanges are welcomed with open arms and benefit from a clear legal framework and the possibility of obtaining an official license.
In the third and final part of the series, we are going to look at which Exchanges have already established themselves in Malta — including industry giants such as Binance and OKEx — and which service portfolios they offer their clients. Finally, we take a look at the future and what role crypto-exchanges will play in the coming months and years.
Existing Exchanges in Malta and their service portfolio?
Due to the innovative and forward-looking legal regulations, especially for Exchanges, some of the largest names in the industry have already decided to establish a branch in Malta. These include Binance — the largest exchange platform in terms of trading volume — as well as OKEx and BitBay.
Binance was founded in 2017 by the experienced Chinese developer Changpeng Zhao and moved from China to Japan to escape the Chinese government’s crypto-ban. Within a very short period of time, many users and investors had been attracted, so that the platform became the largest crypto currency exchange in February 2018 with a market capitalization of USD 1.3 billion.
Binance made the headlines all the more when it announced in March 2018 that it would establish a branch in Malta after Japan announced stricter laws in the area of crypto currencies. Binance currently has more than 90 crypto currencies in its portfolio.
OKEx is another major crypto currency exchange that also announced its intention to move to Malta shortly after Binance in April 2018. Founded in Hong Kong in 2017, the company is currently managed by Andy Cheung. In August 2018, OKEx was the second largest crypto exchange in terms of trading volume and markets served, according to CoinMarketCap. What is remarkable about OKEx is that you can trade futures as well as crypto currency pairs. The functional scope also includes Fiat trading, i.e. trading crypto currencies against fiat currencies, as well as so-called margin trading, in which you can borrow capital from the exchange and thus trade with leverage. Margin trading is possible with more than 100 crypto currencies. In addition, OKEx has BTC, ETH and EOS futures supported by real goods. There are currently a total of 508 markets and crypto currencies that can be traded.
BitBay is a crypto currency exchange originally founded in Poland in 2017, which announced in May 2018 in a press release that it would cease operations in Poland and instead move to the Blockchain Island Malta. Here too, in addition to the problem of obtaining support from Polish banks, the technology and innovation-friendly attitude of the Maltese government was the decisive factor. Although the service choice is somewhat smaller than at Binance and OKEx, there are currently 62 crypto currencies listed on BitBay.
In recent months it has become apparent that many more exchanges will follow the example of Binance and OKEx. In August, zb.com, one of the 5 largest crypto exchanges in the world, announced that it also wanted to set up an exchange in Malta soon. This would allow them to enter the European market and initially offer transactions between crypto currencies, but in the medium term also options to exchange crypto versus Fiat.
After all, the originally American crypto-exchange Bittrex has been represented with its own exchange on the sunny Blockchain Island since October. The company also plans to apply to the Malta Financial Services Authority within the next 12 months for admission as a licensed Virtual Financial Assets Exchange.
OKEx is awarded as “Exchange of The Year”
The Maltese government’s commitment to the establishment of companies in the blockchain sector is also reflected in the event and co-organisation of conferences such as the Malta Blockchain Summit. On the occasion of the conference, which took place in St. Julian’s from 1 to 2 November, the “Exchange of the Year” was elected.
The award was presented in recognition of all those personalities, executives, companies and experts whose extraordinary commitment and dedication have made an active contribution to establishing Malta as an attractive location for blockchain companies from all over the world. In addition, special efforts to develop and improve the customer experience and usability of Exchanges were to be recognised.
Since Binance is the industry leader and was the first major exchange to announce a move to Malta, most probably expected Binance to win the race. But it turned out differently. A high-calibre international jury of 32 crypto and blockchain experts, after extensive analysis of numerous criteria, came to the conclusion that OKEx is the best exchange of the year and should be awarded a prize for it. In the margins of the award ceremony, Joseph Porteli, Chairman of the Malta Stock Exchange, also spoke about a project planned jointly with OKEx to develop a Security Token Exchange in Malta.
Importance of Exchanges in the Future
The role of exchanges for the future of crypto currencies and blockchains cannot be overestimated. The more Initial Coin Offerings and Security Token Offerings spread, the more individuals and organizations become investors in crypto currencies, the more important the efficient, inexpensive and immediate exchange of these crypto currencies will become. Since the number of tradable crypto currencies is also constantly increasing and a future is foreseeable in which crypto currencies will be on a par with the usual fiat currencies, crypto exchanges are predestined to become tomorrow’s sought-after trading places.
Due to the current trend towards the increased holding of security token offerings, i.e. the issue of share-like, securitized tokens, more and more security token exchanges will emerge in the future alongside ordinary crypto-exchanges.
This is also shown by the mentioned pilot project between OKEx and the Malta Stock Exchange with the aim of establishing such an exchange.
The dynamic development in this sector, which is especially emerging in Malta — the most attractive location for crypto exchanges – is to be welcomed. This also creates healthy competition among providers, leading to attractive and user-friendly offerings for customers, while the watchful eyes of the Malta Financial Services Authority ensure exchanges provide a compliant and secure trading environment.