LedgerX First to Receive CFTF Approval for Bitcoin (BTC) Derivatives
LedgerX has received a green light from the Commodities Futures Trading Commission to open a platform for Bitcoin (BTC) derivatives trading.
LedgerX will become a unique platform for trading physical-delivery Bitcoin (BTC) derivatives, after receiving permission from the Commodities Futures Trading Commission to trade BTC derivatives.
The announcement arrived at a time when BTC is making new yearly highs and reigniting investment interest. The CFTC has been accommodating to the digital asset market, provided the market operators are compliant and transparent to avoid money laundering or other illegal financing operations.
“Effective June 24, 2019, LedgerX is also registered as a designated contract market (DCM) under Section 5 of the Commodity Exchange Act (CEA) and Part 38 of the CFTC’s regulations,” announced the CFTC in a press release.
The addition of the LedgerX market operator arrives after the Bakkt exchange was given a green light for testing BTC futures. Additionally, the US SEC has opened a new procedure for a mixed ETF based on BTC and T-bills.
The warming regulatory climate follows months of discussions, in which US-based agencies probed the proposals and attempted to set rules and “tame” the volatile BTC market. BTC futures have been running for more than 18 months now, recently showing a spike in volumes.
Gaining access to the BTC derivatives will be available through the upcoming Omni platform, which is now in pre-registration mode. The LedgerX proposal requires a minimum participation of $10,000. LedgerX Pit also offers an institutional option, with a minimum investment of $5 million for exposure to BTC and other digital assets.
The expansion of BTC into mainstream finance happens at a time when the leading coin has regained dominance over the market, and altcoins have failed to attract more significant interest. BTC has proven to be liquid enough to support a variety of derivative products.
“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,” LedgerX said. “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.”
The market platforms will be unrolled slowly, to test for technological robustness and user experience.