The US Commodity Futures Trading Commission (CFTC) has approved LedgerX, a cryptocurrency trading venue, as a Designated Contract Market (DCM).
This will allow LedgerX to offer bitcoin spot and physically settled derivatives contracts to retail clients, which it plans to do through its new platform, LedgerX Omni.
Founded in 2014, LedgerX obtained approval to act as a Swap Execution Facility (SEF) for institutional crypto trading in late 2017. But, in a blog on the company’s website, CEO Paul Chou claims that “bitcoin was not designed for just institutions” and that this new retail-focused platform will enable individuals to access bitcoin in a more transparent and practical manner than they can right now.
“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. We can now provide a robust market for a much broader audience, providing access to individuals who want to get exposure to the fast-growing crypto investment sector via derivatives products that they could not access in the past,” says Chou in the online post.
LedgerX has now been registered by the CFTC as both a SEF and a Derivatives Clearing Organization (DCO), but Chou says that clearing the necessary hurdles to achieve its current regulatory status was neither a fast nor an easy process.
“It took us more than five years to get to this point. That said, do not heed those who claim a slowly moving government as an excuse to cut corners, or to do things that violate securities laws,” he says.
Chou adds: “The authorities have been very thoughtful and careful in this regard, way beyond any other international government regulatory agency that we see. The United States CFTC, our regulator, has taken extraordinary leadership in this uncharted world of cryptocurrencies. They have recognised that if crypto is a commodity, then we had better make sure that we get it right, and make sure customers are safe.”