LedgerX Receives CFTC Mandate as Bitcoin Derivatives Clearing Organization
- The CFTC noted that this decision does not constitute endorsement of the use of Bitcoin or other digital currencies.
The US Commodity Futures Trading Commission (CFTC) has granted Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term startup LedgerX its official registration as a derivatives clearing organization (DCO), helping solidify LedgerX’s centralized clearing capabilities and allowing the firm to both trade and clear Bitcoin options.
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Following a review of the LedgerX application, the CFTC determined that LedgerX complies with the necessary regulations under the Commodity Exchange Act (CEA).
As a registered DCO, LedgerX will be authorized to provide its suite of clearing services with respect to swaps, subject to certain requirements; and futures and options on futures contracts traded on or subject to the rules of a designated contract market.
LedgerX plans to list and clear fully collateralized, physically settled options on Bitcoin and other Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term.
Upon request, LedgerX was also granted an exemption from complying with certain CFTC regulations due to its fully-collateralized clearing model. More specifically, the Bitcoin options platform will not be required to undertake monthly stress tests of its financial resources to ensure that it could withstand the default of its largest participant.
While a notable milestone, LedgerX also made headlines earlier this month after the CFTC issued an order of registration to the New York-based Bitcoin swap exchange, granting it registration status as a Swap Execution Facility (SEF).
LedgerX is aiming to become the first approved facility where physically-settled options on Bitcoin can be listed and cleared. Many in the crypto industry voiced their support, citing the potential benefits of hedging against market risk and the ability to gain insight into market sentiment and volatility.
The CFTC noted that this authorization decision "does not constitute or imply a commission endorsement of the use of digital currency generally, or bitcoin specifically."
Paul Chou, CEO of LedgerX commented: “A U.S. federally-regulated venue for derivative contracts settling in digital currencies opens the market to a much larger customer base. We are seeing strong demand from institutions that previously could not participate in the bitcoin market due to compliance restrictions against unregulated venues. In particular, there is a desire for fund managers to hold financial instruments that are not correlated with the broader equity market, and digital currencies meet that need.”
The US Commodity Futures Trading Commission (CFTC) has granted Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term startup LedgerX its official registration as a derivatives clearing organization (DCO), helping solidify LedgerX’s centralized clearing capabilities and allowing the firm to both trade and clear Bitcoin options.
The London Summit 2017 is coming, get involved!
Following a review of the LedgerX application, the CFTC determined that LedgerX complies with the necessary regulations under the Commodity Exchange Act (CEA).
As a registered DCO, LedgerX will be authorized to provide its suite of clearing services with respect to swaps, subject to certain requirements; and futures and options on futures contracts traded on or subject to the rules of a designated contract market.
LedgerX plans to list and clear fully collateralized, physically settled options on Bitcoin and other Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term.
Upon request, LedgerX was also granted an exemption from complying with certain CFTC regulations due to its fully-collateralized clearing model. More specifically, the Bitcoin options platform will not be required to undertake monthly stress tests of its financial resources to ensure that it could withstand the default of its largest participant.
While a notable milestone, LedgerX also made headlines earlier this month after the CFTC issued an order of registration to the New York-based Bitcoin swap exchange, granting it registration status as a Swap Execution Facility (SEF).
LedgerX is aiming to become the first approved facility where physically-settled options on Bitcoin can be listed and cleared. Many in the crypto industry voiced their support, citing the potential benefits of hedging against market risk and the ability to gain insight into market sentiment and volatility.
The CFTC noted that this authorization decision "does not constitute or imply a commission endorsement of the use of digital currency generally, or bitcoin specifically."
Paul Chou, CEO of LedgerX commented: “A U.S. federally-regulated venue for derivative contracts settling in digital currencies opens the market to a much larger customer base. We are seeing strong demand from institutions that previously could not participate in the bitcoin market due to compliance restrictions against unregulated venues. In particular, there is a desire for fund managers to hold financial instruments that are not correlated with the broader equity market, and digital currencies meet that need.”