Koine secures FCA EMI authorisationOctober 31, 2019
Koine was granted authorisation for the issuance of electronic money (EMI Licence) by the Financial Conduct Authority (FCA).
Koine selected the UK as its jurisdiction of preference to start its regulatory journey. Koine is also in the process of applying for a number of authorisations in other major financial services locations.
The EMI authorisation allows for Koine to provide real-time e-Money payment services to the growing institutional client universe. While it is linked to, and facilitates the custody and settlement model described below, these services are currently outside the UK regulatory perimeter and the e-Money authorisation should not be read as authorisation of Koine’s transformative custody and settlement model for digital assets.
This model eliminates settlement and counterparty risks by enforcing DVP, while ensuring clients at all times retain beneficial ownership of their assets throughout the trade lifecycle.
Inspired by the best practices of world-famous traditional custodians, Koine has overcome the challenge of safekeeping and settlement of bearer instruments.
With more than 40 institutions, funds and family offices onboarded, Koine represents the culmination of two years’ governance, legal and technical programmes to create an infrastructure suitable for institutional capital. It has engineered a unique solution that sets itself apart from the current hot wallet/cold store model with manual transfers, providing heightened security of assets, with instant settlements and withdrawals.
Leading the Koine team as CEO and Chairman is Hugh L. Hughes, ex-CEO of Société Générale Securities and co-founder of Fixnetix.
Hughes said: “Market reaction to Koine’s ultra-secure scalable institutional class solution for custody and settlement, has been immensely favourable, and with our EMI authorisation now issued by the FCA, we are rapidly moving to implement the market infrastructure necessary to support institutional participation in the digital assets marketplace.
“The FCA’s recognition of the controls and processes that we have put in place for our EMI authorisation, notwithstanding their concerns regarding the digital markets, shows that London can continue to attract financial institutions in the digital markets, alongside traditional capital markets, as long as those institutions can show that they have appropriate governance to address the regulator’s requirements.”
Founded in 2017, Koine offers segregated, institutional custody and settlement of digital assets, providing a transformative security model, eliminating settlement and counterparty risks. For the first time Koine brings together the full suite of governance, compliance, risk management and audit of real-time asset trading to the digital ecosystem; its institutional clients can engage with digital assets whilst fully adhering to regulated market practices.
Koine’s executive team is made up of experienced banking, capital markets and payments professionals; industry stalwarts who understand the need for an interoperable custody and settlement platform that significantly reduces counterparty and settlement risks for trading.
The Koine state-of-the-art platform has been engineered to provide clients with the tools to manage their assets in a low latency, high-volume environment and benefit from increased security, agility and efficiency.
Koine delivers secure digital vaults to the same technical standard as the very best digital cold stores (FIPS 140-2/3) using its Digital Airlock 2122 technology. This new approach, complying with the EAL7+ standard, the highest possible, eliminates the need for hot wallets and human participation in post-trade processes whilst enabling clients to retain instant access to their assets.
Koine is authorised as an Electronic Money Institution (“EMI”) by the UK Financial Conduct Authority (“FCA”) for the issuance of electronic money. This authorisation is distinct from its specific unregulated financial services offerings in respect of custody and settlement of digital assets and fiat money. It is seeking further appropriate regulatory licenses in trusted jurisdictions with the aim of providing its clientele with the most robustly regulated solution available for digital assets at a global level.
Its ground-up architecture, team, governance and systems make it the solution of choice for the professional trading community, delivering a truly institutional service to support all trading styles, from passive holding to high-frequency trading and offering real-time gross and net settlement options. This means digital trading venues and fund managers are turning to Koine to provide independent, institutional custody and settlement of digital assets.