- LedgerX is the first company to get CFTC approval to offer physically-settled bitcoin futures
- The trading would be on their new platform ‘LedgerX Omi’
LedgerX, a very popular New York City-based Bitcoin options trading platform which is “a Us-regulated trading platform for physically –settled digital currency derivatives”, announced today that The US Commodity Trading Commission (CFTC) has granted the start up an official registration as a designated contract maker (DCM). This has helped solidify the company’s regulatory profile and effectively allows the company to offer physically settled Bitcoin futures, as reported by The Financial Times.
LedgerX First to offer physically settled bitcoin futures in the US
LedgerX is one of the many different cryptocurrency exchanges that are seeking clearance to get the Commodity Futures Trading Commission to give them a physically-settled futures contract in bitcoin. This clearance means one can offer institutional and retail investor’s futures alongside options and swaps to retail investors in Singapore as well as New York. This move gives them an added advantage because their competitors such as Bakkt, ErsiX, Seed CX, and CoinFLex have the same products to offer but LedgerX has become the first ever company to have received this special clearance. LedgerX has also been here much longer than it’s competition and has also asked the CFTC to “amend its order of registration as a DCO.”
The company filed an application back in November 2018. As per the blog post by CEO Paul Chou, These new products would be trading on a whole new platform called “LedgerX Omni”:
“With our new license granted today, both retail and institutional customers can interact in the same transparent marketplace, LedgerX Omni, the first and only regulated US institution to offer these capabilities to the retail audience. We can now provide a robust market for a much broader audience, providing access to individuals who want to get exposure to the fast-growing crypto investment sector via derivatives products that they could not access in the past. (…) By operating both the exchange and clearing house, we can uniquely offer clients vertically integrated trading and custody solution.”
Slowly but surely
The post also stated that despite getting the license they still have a very long waiting list and further developments would be a bit slower and all the clients have been requested to be patient so that the onboarding process can be completed under proper supervision which would later result in a streamlined customer experience. The other established futures exchanges like Cboe Global Markets and CME Group also offer bitcoin futures, but they are not physically settled and hence that means the actual cryptocurrency does not move, previously there have been concerns about security issues because the cash-steeled process can often be manipulated. LedgerX can now effectively hedge their exposure across multiple exchanges.
The Cryptocurrency community reacted positively to this announcement and some even believe that has plotted the way to the highly awaited Bitcoin Exchange-Traded Fund (ETF). Currently, LedgerX has more than 200 institutional clients invested in their physically-delivered swap products. All this has further added more credibility to their favor.
