Crypto firm LedgerX obtains CFTC approval for physically-settled derivatives contracts

The United States Commodity Futures Trading Commission (CFTC) has approved the application of crypto derivatives and clearing platform LedgerX for designation as a contract market.

Founded in 2014, LedgerX was registered as a swap execution facility and derivatives clearing organization (DCO) with the CFTC back in 2017.

With the latest approval, the company is now registered as a designated contract market (DCM) under Section 5 of the Commodity Exchange Act (CEA) and Part 38 of the CFTC’s regulations.

According to the press release, registration as a DCM would require LedgerX to ensure continued compliance with all applicable provisions of the CEA and CFTC regulations.

“LedgerX has requested that the CFTC amend its order of registration as a DCO, which limits LedgerX to clearing swaps, to allow it to clear futures listed on its DCM,” the CFTC said.

In an online post dated June 24, LedgerX announced the DCM license will enable it to offer bitcoin spot and physically-settled derivatives contracts (including options, futures, and more) to retail clients of any size.

“With our new license granted today, both retail and institutional customers can interact in the same transparent marketplace, LedgerX Omni, the first and only regulated US institution to offer these capabilities to the retail audience,” the company said.

LedgerX further said that it will carry out the onboarding process slowly while thoroughly testing and monitoring the technology systems and ensuring that “the customer experience is outstanding.”

“The good news is that from day one, new traders will have access to market makers on the platform who have been providing competitive prices 24/7/365 over the last 2 years to the institutional market,” it added.

Meanwhile, a number of cryptocurrency exchanges in the U.S. including Bakkt, Seed CX, and ErisX, are still awaiting regulatory licenses to set foot on the crypto derivatives market, The Block reported.