LedgerX receives CFTC approval for crypto-matched Bitcoin futures

LedgerX, an American Bitcoin derivatives exchange, is now authorized to offer BTC spot and physically settled derivative contracts, subject to CFTC approval. Customers resident in the US and Singapore can register for trading from July 2019.

After years of rumors about US crypto-derivatives being paid out with Bitcoin, a crypto exchange has now been approved by the country’s most important trade authority.

LedgerX, a New York-based crypto currency exchange , received from the US Commodity Futures Trading Commission (CFTC) permission to trade with physically settled futures and swaps in Bitcoin. As the Financial Times reports, official CFTC approval will allow LedgerX to offer its new products to investors in the US and Singapore.

According to the company, trading will start in July, with a minimum deposit of $ 10,000 for investors – either in US dollars or bitcoin . But Paul Chou, the company’s CEO, told Bloomberg that the “minimum deposit will fall to zero within a year”.

Until June 25th, Bitcoin futures could only be settled in cash. DRW, a high-frequency trading group active in the crypto market, told the Financial Times: “The use of cash markets and other associated auctions to price crypto derivatives is” inherently flawed “. In addition, all exchanges should be able to list physically delivered contracts, the group said.

However, LedgerX is currently the only company with this option. The stock exchange’s competitors, notably Bakkt, ErisX and SeedCX, are currently undergoing the lengthy application process at the CFTC.

And while the CME Group and Cboe Global Markets both test trading and deliver Bakkt Bitcoin futures, Chou believes that LedgerX is “far ahead of the pack”. He said that other exchanges are at least six months behind them to obtain CFTC approval for physically settled Bitcoin futures.

The green light of the CFTC could not have come at a better time for LedgerX. According to a recent Diar report, institutional traders are pushing the volume of CME Group and BitMEX “at record levels”. According to the report, even the Intercontinental Exchange (ICE) plans to test its own Bitcoin futures in the second half of July.

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