FTX US to Launch Crypto Derivatives Following Acquisition of LedgerX

US-based cryptocurrency exchange FTX announced today the acquisition of LedgerX, a cryptocurrency trading platform regulated by the Commodity Futures Trading Commission (CFTC).

Terms of the deal, which is expected to be completed in October 2021, were not disclosed and will have no impact on LedgerX’s operations as the exchange will continue to deliver its current offerings to the existing customer base.

As long as the acquisition is closed, FTX.US will have the ability to offer Bitcoin AND Ethereum options and futures contracts to retail and institutional traders, leveraging LedgerX’s relationships with CTFC.

Many of the financial products that FTX offers, including derivatives, are not currently available to US investors.

“This is probably one of the most exciting announcements we’ve had,” FTX founder and CEO Bankman-Fried said of the deal.

Crypto derivatives, such as Bitcoin futures, allow investors to buy or sell assets at a predetermined price without the need to physically hold the underlying asset. y offer investors a way to bet on the prices of cryptocurrencies, as well as to protect themselves from asset volatility.

Other popular crypto derivatives include options and perpetual contracts, which allow investors to buy or sell an asset on a predetermined date at a specific price.

In an interview with decrypt earlier this month, FTX.US president Brett Harrison confirmed that the exchange was working to add crypto derivatives trading to its platform and considered two avenues to achieve this: apply for its own license or acquire. another company that already has that license.

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Currently, FTX.US only supports spot trading for certain cryptocurrencies, including Bitcoin, Ether, Litecoin, and To Tie (USDT).

Focus on regulatory compliance

FTX.US emphasized that it will “dedicate significant resources to developing a strong working relationship with the US regulatory community, in particular the CFTC,” with the ultimate goal of meeting “the rigorous standards of the financial services industry. American people”.

“Common ground between regulators and industry is the foundation for safe and sustainable innovation,” added Bankman-Fried.

Last week, the CFTC moved to clarify its regulatory role in the US, noting that it only monitors instruments such as futures, swaps, and other commodity-based derivatives. agency said that, for example, it will not liquidate commodities traded on spot markets, such as natural gas, but will certainly regulate derivatives based on these commodities.

Within the US market, FTX.US is currently the sixth largest cryptocurrency exchange offering spot trading. With 24-hour volume just under $ 400 million, according to CoinGecko, it is somewhat behind heavyweights like Coinbase and Kraken at $ 5.9 billion and $ 1.5 billion respectively.

Binance.US, which is the US subsidiary of Binance.com, ranks third in terms of daily trade volumes at $ 1.2 billion.

FTX.US, however, will certainly anticipate the increase in overall trading volumes once the exchange is able to open derivatives trading. Currently, the Chicago Mercantile Exchange (CME) is the only regulated place in the United States to offer Bitcoin and Ethereum futures and options.

Also Read Purpose Investments File Crypto ETF Prospectus with Canadian Securities Regulator

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