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LedgerX Gains CFTC License to Offer Physically Settled Crypto Futures Contract

LedgerX becomes the first authorized company to offer physically-delivered Bitcoin contracts. The crypto derivatives platform will now be able to operate in the capacity of a designated contract market.

The 25th day in June, 2019 marked a milestone for the derivatives market as the US Commodity Futures Trading Commission (CFTC) issued a license to LedgerX LLC to function as a Designated Contracts Market (DCM).

The platform will now be able to offer futures contracts with Bitcoin instead of just fiat currencies. The new service provided means that actual cryptocurrencies will be placed into the accounts of the customer upon payday instead of cash.

This is admittedly a first for the derivative market as well as a milestone for the platform as it had operated in the capacity of offering contracts clearing services on futures contract. In effect, the derivatives market had seen futures exchanges such as Cboe’s and CME-run exchanges transact with cash.

LedgerX – before its expansion – had been licensed to clear swaps and futures contracts. The company had also set its plans to extend trading options, swaps and Bitcoin futures to retail investors after noting the reactions of its institutional investors. 

Clearly this paves the way for the New York-based startup as the license gives it an edge over competitors such as Bakkt still awaiting subsequent regulatory approvals. 

Could Regulations be Closing in on the Crypto World?

It is no news that the regulation of the crypto market as well as the derivatives market has been on the table for a significant number of years. As a fact, the US crypto scene had been subjected to various crackdowns in the last couple of years – adding to the hassles of volatility faced by the market.

In effect, the crypto derivatives and futures contracts market had been one of the links between the crypto market and the world of regulations. With the new license issued by the CFTC, it would appear that the crypto world is edging closer towards regulation compliance. 

However, the positivity remains that this move appears to be one that pursues fostering a stable link between cryptocurrencies and the futures market, thus pushing towards mainstream adoption.

In line with this announcement, a significant part of the crypto world voiced their approval, pointing at advancements towards gaining further insights into the market volatility. This news for the crypto world also seems to be a step towards the launch of the anticipated Bitcoin Exchange-Traded Fund (ETF).

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