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currency you hold on your balance sheet ? You need access to good data , you need to understand the liquidity across all markets , you need to do basic risk metrics like value-at-risk and I think that ' s what a lot of the more crypto native firms failed to do , maybe just through lack of experience . They have never worked in traditional finance so did not understand the importance of understanding each individual asset ’ s risk profile . So investors need to take it into their own hands when it comes to risk management . Carefully selecting your infrastructure provider while also leveraging liquidity and risk data – these two things combined will ultimately create a safer trading environment for everyone .
Laurie : Adoption of crypto regulation and would a stronger regulatory framework help or hinder ? Abeetha : Regulation is definitely a good thing , and I think we need it for the industry . Regulation brings clarity , institutional adoption , scalability . For us , looking to put traditional securities on blockchains , there is lots going on in this space . In the UK and Europe there are multiple sandboxes trying to put digital assets onto DLT , and amending the current sets of regulation to accommodate that . The EU DLT pilot regime which will kick off next year will basically streamline the post-trade environment using DLT rails and that will be a very positive step in the right direction to make the post-trade and eventually the pretrade environment much more efficient and scalable . In the 1970s we went from paper to electronic trading and I think right now we are seeing a similar shift from electronic to digital .
Taylor : It ’ s arguable that the reason liquidity went offshore was due to a lack of clarity from the regulators and that didn ' t need to happen . We are massive proponents of regulatory clarity , we work with the regulators to the best of our ability and want to ensure that there is clarity in as many jurisdictions as possible so financial services benefits worldwide and we can increase the velocity of progress .
Laurie : Are there things that you can ' t do right now because you don ' t have the permissibility , the approvals , or perhaps even just the client confidence to do them ? Jenna : Less so for LMAX but for our clients , absolutely . We look after banks and non-banks : all the non-banks trade crypto on LMAX digital but all the
30 // TheTRADE // Q4 2022