{"id":23441,"date":"2017-07-25T23:33:16","date_gmt":"2017-07-25T23:33:16","guid":{"rendered":"http:\/\/ci027cfe79900b2697"},"modified":"2017-07-25T23:33:16","modified_gmt":"2017-07-25T23:33:16","slug":"federal-government-approves-regulation-request-ledgerx","status":"publish","type":"post","link":"https:\/\/bitcoinmagazine.com\/culture\/federal-government-approves-regulation-request-ledgerx","title":{"rendered":"Federal Government Approves Regulation Request of LedgerX"},"content":{"rendered":"
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On July 24, LedgerX announced<\/a> the CFTC\u2019s approval for a Derivatives Clearing Organization (DCO) license under the Commodity Exchange Act (CEA). The license will allow the company to provide clearing services for fully collateralized digital currency swaps for the first time. On July 6, the CFTC also granted LedgerX an order of registration as a Swap Execution Facility. The company, which was founded in 2013, already received a temporary approval<\/a> as a Swap Execution Facility in 2015.<\/p>\n

Despite the approval, the CFTC highlighted<\/a> that LedgerX\u2019s current authorization \u201cdoes not constitute or imply a Commission endorsement of the use of digital currency generally, or bitcoin specifically.\u201d The Commission added that, along with the approval, it had issued a letter on July 24 exempting LedgerX from \u201ccertain regulations\u201d implied by the CFTC due to the firm\u2019s fully collateralized clearing model.<\/p>\n

By obtaining a DCO license, LedgerX will be able to provide specific services on the company\u2019s platform to participants, including obtaining and hedging bitcoin and other cryptocurrencies by using exchange-traded and centrally cleared option contracts. With the regulatory approval, the company expects to list one- to six-month options contracts for bitcoin in addition to adding contracts for other cryptocurrencies, such as ETH options.<\/p>\n

\u201cA U.S. federally regulated venue for derivative contracts settling in digital currencies opens the market to a much larger customer base,\u201d Paul L. Chou, the CEO of LedgerX, said in a statement. \u201cWe 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.\u201d<\/p>\n

LedgerX is planning to provide required services, such as surveillance and transparency, for institutional investors. According to the company, participants eligible for LedgerX\u2019s services include registered broker dealers, banks, futures commission merchants, qualified commodity pool entities and qualified high-net-worth investors.<\/p>\n

\u201cThese are exciting times to have a new digital asset class emerge. I hope that the effort LedgerX put forward in the U.S. can set the stage for a global approach to this new digital asset class,\u201d Mark Wetjen, a member of the board of directors for LedgerX\u2019s parent company, Ledger Holdings, stated.<\/p>\n

According to Chou<\/a>, the approval for the license took more than two years partly because of a long education process. LedgerX secured $11.4 million of funding in May, led by Miami International Holdings Inc. and China\u2019s Huiyin Blockchain Venture Investments, to acquire the clearing license from the CFTC.<\/p>\n

\u201cLedgerX\u2019s registration is a historic milestone for derivatives and for digital currencies. To me, it is equivalent to the launch of currency futures back in 1972 that heralded the beginning of exchange-traded and cleared derivatives based on financial products,\u201d Gary DeWaal of Katten Muchin Rosenman LLP, one of the companies assisting LedgerX during its CFTC application process, said in a statement.<\/p>\n","protected":false},"excerpt":{"rendered":"

On July 24, LedgerX announced the CFTC\u2019s approval for a Derivatives Clearing Organization (DCO) license under the Commodity Exchange Act (CEA). The license will allow the company to provide clearing services for fully collateralized digital currency swaps for the first time. On July 6, the CFTC also granted LedgerX an order of registration as a […]<\/p>\n","protected":false},"author":3533,"featured_media":23442,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33],"tags":[],"class_list":{"0":"post-23441","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-culture"},"author_data":{"id":3533,"name":"Benjamin Vitaris","nicename":"benjamin-vitaris","avatar_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/12\/benjamin-vitaris-promo-image-96x96.jpg"},"featured_image_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/11\/federal-government-approves-regulation-request-of-ledgerx.jpg","_links":{"self":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/23441","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/users\/3533"}],"replies":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/comments?post=23441"}],"version-history":[{"count":0,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/23441\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media\/23442"}],"wp:attachment":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media?parent=23441"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/categories?post=23441"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/tags?post=23441"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}