James Newsome, Independent Director, LedgerX board
"By providing liquidity and a secure venue for investors to manage short and long-term risk, LedgerX will facilitate the evolution and adoption of bitcoin."
LedgerX, New York, has filed with the US CFTC to operate a bitcoin options exchange and clearing house. If approved, LedgerX will become the first federally regulated bitcoin derivatives clearing house for institutional participants. There are only 14 clearing licenses that have been issued by the CFTC. This would be the first clearing license issued for digital currency derivatives.
The clearing license for bitcoin, enables the exchange to be the direct counterparty to every trade, and to settle trades with the physical delivery of dollars or bitcoins. Bitcoins would be delivered to the participants bitcoin wallet.
"Digital currency derivatives present a huge opportunity, but to gain mainstream adoption, a regulated market will need to be developed," said James Newsome, former Chairman of the CFTC, former CEO of NYMEX, and one of the two independent directors on LedgerX's board. "By providing liquidity and a secure venue for investors to manage short and long-term risk, LedgerX will facilitate the evolution and adoption of bitcoin."
A comment period is open until the end of the week and comments have been received by LightSpeed Ventures and the Midas Advisory Group.
LedgerX is planning to bring together corporations seeking to hedge their bitcoin exposures together with financial institutions searching for trading and investment opportunities. More than 80,000 entities accept bitcoin, including brand names such as Dell, Expedia and PayPal.