New York-based crypto derivatives exchange and clearinghouse, LedgerX, has earned the first U.S. license from the Commodity Futures Trading Commission (CFTC) to offer physically settled bitcoin futures contracts – beating Bakkt, Seed CX and ErisX in the race.
“The Commodity Futures Trading Commission (CFTC) announced today that it has approved the application of LedgerX LLC (LedgerX) for designation as a contract market,” said the agency in today’s press release.
When trading physically delivered futures contracts, clients are paid out in actual bitcoin at the time of the contract’s expiration vs. pegging crypto futures to USD and being paid out in cash (market leader CME currently only offers cash-settled futures).
Not only will this allow LedgerX to cater to the institutional market, but the approval means that the New York-based firm can now offer its product to the crucial market of retail clients. Known as Omni, the new futures platform will form part of the firm’s broader retail push. “There’s no doubt that we’re looking to be first, we’re looking to be the incumbent,” said Juthica Chou, Chief Operating and Risk Officer, in a statement to CoinDesk. “We think we’re better positioned and we want to be there to serve customers of all sizes.”
The application was a months-long process, as LedgerX applied for the designated contract market (DCM) license in November 2018. No timeline was indicated from the CFTC for when LedgerX will begin offering bitcoin futures.