Everbloom Regulatory and Product Update
Welcome! This post will share a look into the Everbloom roadmap in terms of both compliance and product. We will first take a quick moment to reflect on our progress and revisit our values, then we will jump into the updates.
Reflecting on our progress, we can confidently say that the Everbloom Exchange is at or beyond feature parity with the vast majority of decentralized exchanges. The platform now has support for four wallets: Metamask, Coinbase Wallet, Cipher, and Ledger. The UI has improved through features like customizable layouts and fiat estimates. We accomplished this despite having less capital and a smaller team than many of our peers. This is a testament to the quality of our team.
Around the web, CoinDesk covered Everbloom in their article, Why This Decentralized Exchange Wants a License, providing insights into our regulatory approach.
Looking to the future, we have several exciting initiatives underway. Before we share more, it first makes sense to revisit the overall mission and values of Everbloom. Once the stage is set, we can examine a few key initiatives and highlight our product roadmap and regulatory compliance strategy.
Values
Everbloom was founded on the notion that non-custodial, decentralized exchanges have potential to improve digital markets. They put the power in the hands of users to determine their own custody needs while at the same time connecting them to a pool of secure and open liquidity. They remove the need to trust exchanges with your funds. Like many others in world of digital assets and cryptocurrencies, we too saw the problems of first generation custodial exchanges after seeing hack after hack. Many of these exchanges were poorly capitalized, unprofessionally managed, and insecure. A new approach was needed. We believe that separating custody and exchange is important to the future of this ecosystem. Announcements from emerging custody providers like Fidelity and acquisitions of DEXs by firms such as Coinbase provide ample validation of this thesis.
We also have a focus on the needs of institutions. We have heard loud and clear from many institutions that while they find the security and other advantages of non-custodial exchanges compelling, they will not participate on exchanges that do not have compliance procedures such as KYC and AML. Unfortunately, most decentralized exchanges do not implement these controls today. That said, institutions will adopt non-custodial exchanges as soon as concerns such as KYC and AML procedures are addressed.
Regulation
On the point of regulatory clarity, the industry is increasingly getting direction from regulators. For example, through recent orders and advisory notices, the SEC in particular has broadly asserted that most digital assets, especially those sold in ICOs, are securities. They have also asserted that security trading venues need to be registered exchanges or qualify for an exemption (e.g., by becoming a registered ATS).
The reality is that it will take time to sort through the many digital assets to determine which are securities and thus what venues need to be licensed. There are aspects of digital assets that make them fundamentally different and hard to classify. There are also other jurisdictions and other regulations to consider. Taken together, there is a vast amount of work ahead of us, both for the industry and for the regulators. We believe in working together on these tough problems so we can both continue to innovate and avoid systemic risks that organizations like the SEC were created to prevent.
Regulatory Roadmap
To us, one thing is clear: our intention is to create a fully compliant exchange that can trade digital assets, including those deemed securities. As a result, we are pursuing two efforts as our next steps down this path:
- KYC: we are gearing up to launch one of the first non-custodial exchanges with a full KYC process and all of the associated policies and procedures. Blockchains will provide a decentralized settlement layer as the underpinning, creating an effective and open way to connect with emerging custody solutions for both consumers (e.g., Coinbase Wallet) and institutions (e.g., Fidelity).
- ATS: we are actively working on an application for a broker registration which, if obtained, will allow us to proceed toward an ATS registration. This will allow us to list securities on the platform.
To support these efforts, we are actively hiring a Chief Compliance Officer. If you interested, please reach out. This person will help shape our regulatory strategy, be proactive with regulators, and implement the nuts and bolts of long-term compliance.
In the meantime, we will operate as an exchange for digital assets which are not securities. To that end, we are pausing new listings and creating a new, more rigorous listing process. In the meantime, we have taken measures to remove stale tokens and other assets until we are ready. Please reach out to Everbloom support if there are any questions.
Product Roadmap
Apart from adding compliance features and support for additional wallets, we are also hard at work on adding blockchains beyond Ethereum. This means developing solutions for cross-chain trading while still remaining non-custodial. Atomic swaps across blockchains is one approach we are exploring.
Improving the trading experience is also high on our list. This means more custody and wallet integrations, better reporting, more insights, more protocol support, additional types of assets, and so on.
The trading experience on most decentralized and non-custodial exchanges is largely the same. We are working to change that. If you are an active institution or trader and have unfulfilled needs, please connect with us on Telegram or email.
Summary
In summary, the team at Everbloom is working hard to deliver a compliant exchange for a range of digital assets. We will be rolling out KYC in the coming months and adding features that institutions require. We will also continue to drive forward with our broker application.
Our mission is to build an exchange that allows both retail and institutions to comfortably trade together while still leveraging all of the security and plug-and-play custody benefits of the blockchain.
