Stefan Hendrickx, Ancoa
"There is clear regulatory appetite for greater transparency and investor protection in bitcoin markets."
London and New York - Ancoa will be delivering the first real-time market surveillance capability for bitcoin options trading. Using the platform, LedgerX will be able to instantaneously identify and investigate manipulative behaviors and suspicious trading practices on its own exchange, across other derivatives exchanges and across the multitude of bitcoin spot markets.
LedgerX is currently awaiting regulatory approval from the US Commodity Futures Trading Commission (CFTC) to operate the first US regulated exchange and clearing house for trading bitcoin options. Upon approval, eligible participating institutions can use the LedgerX platform to obtain and hedge bitcoin using exchange-traded and centrally-cleared options contracts.
Paul Chou, chief executive of LedgerX said: "We believe a comprehensive surveillance system will protect our participants, garner trust from institutional traders and help to grow the bitcoin market."
Because bitcoin is a nascent market, the dynamics of the bitcoin market continue to develop, and analysing traditional and non-traditional data sources helps protect participants while also helping manage an orderly market place, he noted.
"We face a problem of data deluge," Chou added. "As an options exchange, we must track the bitcoin spot market - which is widely disbursed across the globe. And, even though we are building an institutional marketplace, we must also track retail trade flow."
Ancoa uses contextual surveillance, referring to integration and display of multiple feeds and data types for analysis. For example, calling up past trades and overlaying news or emails, or a specific set of bitcoin spot rates in order to detect irregular trading patterns in real time.
Commenting on the release, Stefan Hendrickx, founder and executive director of Ancoa, said: "There is clear regulatory appetite for greater transparency and investor protection in bitcoin markets. LedgerX's best-in-class technology and innovative products, paired with our surveillance capabilities, will support LedgerX's goal of running a robust, federally regulated bitcoin options exchange and clearing house."