Boca Raton, Florida, March 13, 2018 (GLOBE NEWSWIRE) -- Today, at the Futures Industry Association Conference in Boca Raton, Florida, J. Robert Collins Jr., former President of the New York Mercantile Exchange, and a founder of the Dubai Mercantile Exchange, announced the formation of both the San Juan Mercantile Exchange (SJMX)—an institutional-grade electronic trading platform for digital assets—and the San Juan Mercantile Bank and Trust (SJMB&T)—a regulated financial entity that will hold fiat currency and digital assets. Mr. Collins will serve as Chief Executive Officer of both SJMX and SJMB&T.
Most digital currency trading platforms in the market were developed for retail investors, are unreliable during peak times, incompatible with institutional trading systems, vulnerable to cyber attacks, place limitations on withdrawals and often have delayed and unpredictable processing times.
Currently, a majority of global trading volume in digital currencies occurs on unregulated or noncompliant exchanges, most of which do not accept U.S. customers. As a result, existing exchanges are not technically capable of handling the institutional demand for higher volume trades with Wall Street-level speed, security and compliance.
According to the Financial Times, many top-tier high-frequency trading firms involved in digital currencies “are conducting many of their trades with tools such as email, Skype and phones.” SJMX will solve those challenges.
“Banks, hedge funds, high-frequency traders and institutional investors around the world are eager to enter into the digital currency market,” said Collins. “Until now, they’ve been forced to use slow, unsafe trading platforms geared toward retail investors with different needs and expectations. The SJMX and SJMB&T will change that.”
SJMX and SJMB&T are being formed to provide customers with the ability to purchase and sell digital currencies and assets through integrated trading, custody and asset management systems that deliver the performance, security and regulatory compliance required by institutional investors and traders. SJMX and SJMB&T plan to commence operation by October 2018.
SJMX will offer institutional-grade connectivity and protocol standards through an agreement with CQG, Inc., which will provide customers with access to more than 40 global exchanges worldwide. SJMX will also have the ability in the future to connect its customers to other digital currency exchanges for efficient arbitrage transactions and cross-margining. SJMX’s state-of-the-art trading system will include analytics and risk management tools.
SJMX’s electronic trading platform will process at least 1.5 million transactions per second, have a latency of 3 milliseconds, and be capable of handling billions of dollars in trade volume per day. The trading platform will feature institutional security standards, no limitations on the amount of fiat or digital currency withdrawals and standard U.S. bank processing times.
All funds traded on the SJMX trading platform will be held in trust accounts at a regulated financial institution, such as a bank or trust company. SJMX plans to list up to 10 digital currencies at launch and plans to expand to offer a range of digital assets including additional digital currencies and utility tokens. The exchange plans to have offices in San Juan, Puerto Rico and Chicago.
A Member Exchange
SJMX will be a member exchange. Target members of SJMX include proprietary trading firms, hedge funds, institutional investors, and other professional traders and service providers involved in the purchase and sale of digital currencies and assets. Membership in SJMX is obtained by acquiring preferred shares of SJMX (Membership Shares).
Fifty Principal Memberships will be available to target members over the next 45 days in a limited offering, with additional offerings of Membership Shares planned over the next 180 days. Each Principal Membership will entitle members to a 100% discount on execution and market data fees of up to $1 million per year, and a 50% discount on such fees after that. Membership Shares may also be leased, or redeemed for credits applied to the payment of fees. Subject to applicable laws and exchange rules, Membership Shares will be digital securities represented by equity tokens.
Non-members may also purchase and sell digital assets on SJMX’s trading platform, but will not receive any of the discounts or other benefits available to members.
Integrated Banking & Trust Services
SJMX will be integrated with San Juan Mercantile Bank & Trust Company. The bank, which is in the process of formation and is subject to regulatory approvals, will hold customer deposits in U.S. dollars and offer third-party custodial arrangement for secure digital currency storage.
The bank plans to offer customer services such as margin loans and integration with a major correspondent bank, with access to all G20 currencies and protection against theft, misplacement and damage. Fiat currency will be deposited with correspondent banks, regulated financial entities such as broker-dealers and trust companies, or the Federal Reserve.
Digital assets will be maintained with experienced custodians, such as trust companies, that specialize in holding and managing digital currencies and assets. Insurance will be offered to customers to the extent available. All customers of SJMX and SJMB&T will be subject to U.S. Federal Anti-Money Laundering and Know Your Customer review.
For additional information:
About J. Robert Collins Jr.
Mr. Collins served as the President of New York Mercantile Exchange (“NYMEX”) from 2001 to 2004, which was the largest commodities exchange in the world during such time. Under his leadership, NYMEX launched Clearport Clearing, the first commercially successful OTC clearing platform. Mr. Collins also initiated and led the development of the Dubai Mercantile Exchange.
During his time at NYMEX, Mr. Collins brought the exchange into a new era of electronic trading and increased the market cap from $600 million to $2.7 billion within three years (amidst the 9/11 attacks, Enron bankruptcy and largest power outage in U.S. history). Additionally, he led the exchange to an initial S&P credit rating of A++ and its recognition by Energy Risk magazine as the 2004 “Exchange of the Year.” In 2008, in partnership with NASDAQ, Mr. Collins launched a new clearinghouse, the International Derivatives Clearing Group, which was later sold to LCH.Clearnet Group.
Mr. Collins is an active entrepreneur and respected fintech professional currently involved in successful ventures such as Matrix Global, the first crude oil storage auction platform. He has also launched an incubator initiative to utilize innovative solutions such as digital currencies and blockchain technology to improve infrastructure development, physical logistics, financial trading and exchange clearing.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy any security. Any such offer will be made by customary offering documentation, agreed to and signed by SJMX and in compliance with U.S. federal securities laws and any other applicable federal or state laws. This press release contains statements which may constitute forward-looking statements, which can be identified by the words “may,” “will,” “could,” “should,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan” or words of similar meaning. Forward-looking statements are subject to inherent uncertainties, risks and changes in circumstances that may differ materially from those contemplated or implied by the forward-looking statements. All forward-looking statements in this press release speak only as of the date of this release.
A photo accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/cc64468e-d87e-4d7b-b7bd-49128b058b9f
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