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The New York-based cryptocurrency trading platform, LedgerX, announced its plan to create Bitcoin options contracts.
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The New York-based cryptocurrency trading platform, LedgerX, announced its plan to create Bitcoin options contracts.
LedgerX Receives CFTC Approval
On July 24, the cryptocurrency trading platform LedgerX, officially got approval by the U.S. Commodity Futures Trading Commission, to operate as a federally-regulated exchange and decided to announce its plans to offer Bitcoin options contracts. In an official press release, the New York-based platform explained in detail its plan to create one to six month Bitcoin options contracts. In a Bloomberg article, the CEO and Co-Founder of LedgerX LLC, Paul Choo quoted following:
We’re getting people that want to hedge and people that want exposure to a new asset class that they can add to their portfolio and help diversify, and get potential upside of potential digital currency.
Mr.Choo is hoping that these options contracts will allow mainstream investors and traders to include Bitcoin into their portfolios and thus increase the popularity of Bitcoin. The cryptocurrency platform is also planning to offer Ethereum options contracts for the future.
More Regulatory Hoops to Jump Through
After the U.S. Commodity Futures Trading Commission granted LedgerX LLC a derivatives clearing organization (DCO) license, it will need to comply with certain regulatory measures that are imposed by the SEC. With the new license, the platform can legally provide financial instruments that are backed by cryptocurrencies like Bitcoin, Ethereum, Litecoin etc.
But this new license won’t just come with benefits only. LedgerX will be obligated to make their user-data more transparent for regulatory and law enforcement agencies. These new regulatory measures might make traders and investors think twice before they start trading on the cryptocurrency platform.
Mr.Choo believes that these measures will be an important step for cryptocurrency adoption by banks, broker dealers, eligible investors, and futures commission merchants. The Co-Founder also added following:
It means a lot, not just for the industry, but globally, because the CFTC will set the example of what a well-licensed clearinghouse and exchange based around digital currencies will look like.
European and Asian regulators have been strangling to properly regulate cryptocurrency exchanges and platform. CFTC’s decision might set the foundation for future regulatory guidelines of cryptocurrency exchanges worldwide.
What are your thoughts on the Bitcoin options contracts? Do you think that CFTC’s decision will set a new regulatory standard for cryptocurrency exchanges? Let us know in the comments below!
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