LedgerX wins CFTC approval for crypto-settled Bitcoin futures

LedgerX, a U.S. based Bitcoin derivatives exchange, finally won approval from the CFTC to offer BTC spot and physically settled derivatives contracts.

LedgerX, a New York-based cryptocurrency exchange, received clearance from the U.S. Commodity Futures Trading Commission to trade physically-settled futures and swaps contracts in Bitcoin.

Official CFTC approval will allow LedgerX to offer its new products to investors in the U.S. and Singapore, the Financial Times reported.

Trading will start in July, the company said, with investor initially required to deposit at least $10,000, either in U.S. dollars or in Bitcoin.

LedgerX the first exchange to expand Bitcoin derivatives offer.

25, the only way to settle Bitcoin futures was cash.

DRW, a high-frequency trading group that has been active in the crypto market, told the Financial Times that using cash markets and other related auctions to finalize prices of crypto derivatives was "Inherently flawed." They also added that all exchanges should be able to list physically delivered contracts.

The exchange's competitors, most notably Bakkt, ErisX, and SeedCX, are currently going through the lengthy application process with the CFTC. And while CME Group and Cboe Global Markets have both been testing trading and delivering Bakkt Bitcoin futures, Chou believes LedgerX is "Way ahead" of those test efforts.

He said that other exchanges are at least six months behind them in gaining CFTC approval for physically settled Bitcoin futures.

Getting the green light from the CFTC couldn't have come at a better time for LedgerX. According to a recent report from Diar, CME Group and BitMEX have seen institutional traders drive trading volumes "To record levels." Even the Intercontinental Exchange is planning on testing its own Bitcoin futures in the second half of July, the report noted.