May 18, 2022

First regulated decentralized finance platform opens to general public

Swarm Markets, which operates a regulated decentralized trading exchange (DEX), today announces it is available to the general public. This is the first unified platform where both retail and institutional investors will be able to trade securities alongside crypto.

The launch comes as total value locked in DeFi platforms has swelled to almost $90 billion, according to DeFi Pulse, since summer 2020, and regulators across the globe begin to crackdown on unlicensed crypto platforms.

Swarm Markets operates under regulatory license from the Federal Financial Supervisory Authority (BaFin) in Germany, provided to Swarm Capital GmbH Branch Office Berlin, and is supported by Swarm Markets GmbH (together “Swarm Markets”). 

Co-founder of Swarm Markets, Philipp Pieper, said, “Swarm Markets is skating to where the puck is heading by having regulatory authorisation from a globally-recognised regulator from the outset. BaFin has been extremely forward leaning and provided clarity on how it will govern DeFi, giving entrepreneurs confidence that will allow a healthy market to develop with a regulatory approach. 

“We have the privilege of working with some of the most progressive legal minds in the crypto space and have been engaging in an ongoing dialogue with BaFin for the past two years, interpreting securities laws and applying them to assets on the Blockchain. 

“Regulators are starting to see the benefits of integrating traditional markets with blockchain technology, namely the transparency of transactions so regulators can lift the hood themselves and see what is happening in real time, reducing their reliance on companies reporting to them.”

The platform employs the same know-your-customer (KYC) and anti-money laundering (AML) protocols as other licensed financial service providers like banks, removing counterparty risk for users and enabling it to welcome new types of market participants and assets to DeFi. 

Early adopters of the platform will enjoy greater rewards for adding liquidity and trading. Rewards are paid out weekly and boosts are available for users who hold SMT, the Swarm Markets payment token that facilitates efficient transactions on the platform. The platform reimburses gas fees on all transactions involving trading and adding liquidity.  

Similar to other DeFi protocols, users on Swarm Markets can enjoy networked liquidity with self-custody.

Timo Lehes, co-founder of Swarm Markets, added, “The opening of Swarm Markets is a historic step to move corporate cryptocurrency trading out of its legal grey area and offers sophisticated institutional investors and their clients the full scope of benefits from trading digital assets, including the high APYs attendant to DeFi, for the very first time.

“There are several layers of uncertainty that need to be addressed with regulation in order to build trust. More than just a DEX with KYC, our regulatory status means we can onboard new assets and participants into the DeFi ecosystem that others cannot. We believe assets on the Blockchain can be regulated to provide the same consumer protections as in traditional finance without sacrificing the benefits of innovation. 

“Our goal is to integrate traditional markets with Blockchain technology. Not only can existing market infrastructure be replicated on the Blockchain with greater efficiencies, but this technology will enable traders and asset holders to do more and have greater autonomy over the markets they want to participate in.”

Ethereum, Wrapped Bitcoin, SMT, DAI and USDC are currently available on the platform, with new types of assets being introduced in the near future. Swarm Markets launched its liquidity provider programme in July 2021. To date, nearly 2,000 people have registered for the programme, pledging over $100 million in aggregated assets.


Notes to 

  • Swarm Markets operates on the following provisional licenses under the German Banking Act (KWG) provided to Swarm Capital GmbH: Commission Business; Agent Broking; Trading on own account; and Custodian Business. More information can be found here: 
  • BaFin modernised its securities laws, making an amendment to the German Banking Act in January 2020, stipulating all DLT-issued and crypto assets should be classified as securities.
  • More information on Swarm Markets’ payment token, SMT, can be found on our website.  
  • Rewards information for liquidity providers and traders can be found here.
  • Sign up to the Swarm Markets platform using this link

About Swarm MarketsBerlin-based Swarm Markets is the world’s first BaFin-regulated DeFi platform, providing a high liquidity protocol to financial institutions and retail traders. For the first time, financial products like stocks can be digitised and traded alongside crypto on one unified platform, bridging the gap between CeFi and DeFi. It’s co-founders have been engaged in crypto since 2016 and initiated the non-profit DAO Swarm Network. Crypto holders can trade with verified counterparties, earn by providing liquidity and find liquidity for tokenized assets in one regulated environment. For more information, visit the website and Medium page.