CoinFLEX has announced the launch of a physically delivered cryptocurrency futures exchange for its Asian clients.
As per the February 20 announcement, the exchange will offer futures contracts on Bitcoin, Bitcoin Cash, and Ethereum with a 20 times leverage.
In a detailed Medium post, the Hong Kong-based exchange’s CEO Mark Lamb detailed the difference between a traditional futures exchange and a crypto futures exchange. He explained that in a traditional setup, a minimum of two, or in some cases three or four intermediaries, are involved between the exchange and the customer. Moreover, the futures brokerages and Futures Commission Merchants (FCMs) usually stipulate the offerings to high net worth individuals or professional traders.
However, in the case of a crypto exchange, the process is simplified with the elimination of all the middle players.
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“I fell in love with bitcoin because it’s peer-to-peer, open, and transparent,” Lamb noted. “Everyone has the chance to transact on the same network. Anyone who has the tools can run a node and I won’t reject your Proof of Work because you come from a different country, don’t speak my language, or don’t meet a government-set ‘capital requirement.’”
Explaining the structure of the futures instruments, he stated: “Crypto derivatives are built in the same fashion as bitcoin. Virtually anyone can sign up regardless of wealth, geographic location, or whether or not he or she has a bank account.”
CoinFLEX is a spin-off from the UK-based cryptocurrency exchange Coinfloor. The Seychelles-incorporated exchange also attracted some notable names as its promoters including Trading Technologies International, Dragonfly Capital Partners, and crypto trader Mike Komaransky.
The exchange claims that it is the first crypto exchange to offer physical delivery of the contracts which will reduce the risk of cash price settlement risk. As mentioned on its website, the platform has kept the taker fee at 0.03 percent with 99 percent multi-signature cold storage.
Will Asia Follow the US Trend?
Although there is significant demand for crypto futures in the Asian market, it is drastically declining in the United States. Earlier this month, Finance Magnates reported that Bitcoin futures issued by CBOE and CME Group in the US had registered lowest trading volume in December since its launch.