Koinju is now a Benchmarks Administrator.
Put your coffee on the table, because we’re back with a big news. From now on Koinju is registered (1) and regulated as a “Benchmarks Administrator” (2). For the first time, the French Financial Markets Authority (the ‘AMF’) authorized a crypto data-processing actor to provide standardized indices and reference rates to the financial industry. You are a fund administrator, investing in crypto assets, seeking to measure the performance of the fund (or replicate an index performance) or NAV calculation, and assessing the fair value of the shares? You are a market operator, and you aim to build derivative products based on crypto indices and reference rates? You are a portfolio manager, and you want to define your crypto assets allocation? Or maybe you are a company aiming to diversify your treasury with crypto assets, and you want your accountant to deal with it? Well then, we can provide you best-in-class crypto data for your needs, with the highest level of compliance and transparency.
The registration process was a pretty long journey. Let us tell you the story:
Benchmark regulation 101
In a nutshell, the ‘Benchmarks Regulation’ (the ‘BMR’) (3) has been promulgated in response to the ‘Libor’ scandal (and some other interbank reference rates) to prevent conflicts of interest risks in indices-setting processes. It aims to bind the different stakeholders of the benchmark to a better transparency. For a complete presentation, see briefly exposed it in a previous article.
Transparency of the benchmark Administrator processes, the ‘Input Data Contributor’ (4), and any external ‘Service Provider’ (5) the Administrator calls on aims to mitigate risks of calculation arbitration, price determination distortion, and market manipulation. This way, investors (benchmarks users) can make their risk-investment exposure rely on a more objective information.
Why did we apply for a BMR registration procedure?
We assume crypto economy isn’t built by developers, not traders. Crypto market and onchain data do not have a shared data format and do not fit with traditional finance ones. But on the one hand, investors need ‘clean’ data they can easily use to empower their decision-making, not losing time and money in data verification nor standard formatting. On the other hand, most of the existing blockchain and crypto-related data can’t reasonably comply with legal and accounting standards.
So, we’re deeply convinced that being regulated for crypto data providing will be the bridge that link crypto economy and traditional finance standards. It’s a guarantee of legal certainty for crypto data customers: we make all our efforts to ensure index providing integrity and transparency. BMR registration was a big step for us, but a small stone helping the crypto market institutionalization and widely adoption.
Which difficulties we mainly had to face during this procedure?
As you might guess: BMR hasn’t been designed for crypto indices. Blockchain and crypto assets are just newly regulated in France for a bunch of services. Index providing is not one of them. European Union is still in the very early-stage of a common regulation-package adoption for crypto-related services. But a BMR restatement does not seem to be scheduled. Stated differently: it was not an easy work for the national authority to deal with our case without an adapted legal basis.
The registration process has involved a long instruction: it was a 12-months running, paved with back-and-forth discussions with the AMF. Beyond ‘traditional’ questions focusing on our methodology and internal procedures, some questions appointed specific difficulties due to the particularity of the crypto market. For instance, the regulator needed to understand the nature of our input data sources because market data is not strictly provided by ‘Input Data Contributors’ (contrary to traditional benchmarks), but readily available on several exchanges platforms’ APIs. Another example: the AMF asked us the difference between CoinMarketCap volumes calculation and ours. Lol.
What are the legal obligations we’re bound to respect?
As a Koinju Benchmark(s) user, you can now easily notice that we make our calculation methodology and policies public. We provide general information about our benchmarks, give you access to a complaint mechanism, and communicate about potential conflicts of interest. Furthermore, we put in place an ‘Oversight Function’ (6), which continuously controls the respect of these obligations by the Administrator and ensure an internal risk management.
-Bob: I’m a beginner wanting to know crypto prices to invest in.
-Alice: I’m a Jedi master, but I’d like compliant and high-quality data.
-Both: How can we access to your data?
Market trends shown on Koinju are just aggregated prices calculated with another methodology, and different data sources. To access our regulated reference rates and indices, just contact us (https://koinju.io/contact).
Crypto data shouldn’t be a pain.
Check crypto market here: https://koinju.io
(1) Koinju is an exclusive property of Maarkt, a French simplified joint-stock company registered in the European Security Market Authority’s benchmark register under the n° BMR2021000001.
(2) An Administrator is ‘a natural or legal person that has control over the provision of a benchmark’ (cf. art. 3.1–6 BMR). Provision of a benchmark means ‘administering the arrangements for determining a benchmark; (b) collecting, analysing or processing input data for determining a benchmark; and © determining a benchmark through the application of a formula or other method of calculation or by an assessment of input data provided for that purpose’ (cf. art. 3.1–5 BMR).
(3) Regulation (UE) 2016/1011 of the European Parliament and the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014.
(4) A Contributor is ‘a natural or legal person contributing input data’ that serves for the benchmark calculation (cf. 3.1–9 BMR).
(5) Cf. art. 10 BMR.
(6) Cf. art. 5 BMR.
