FTX to acquire LedgerX to create CFTC-regulated crypto giant

Rick Steves

“FTX.US has taken the view, which we share, that US regulators are ready and willing to partner on innovative products, and it’s the responsibility of the industry as a whole to step up and work with agencies like the CFTC”

FTX, the US-regulated cryptocurrency exchange which has recently partnered with Shark Tank investor Kevin O’Leary, has agreed to acquire LedgerX, a CFTC-regulated exchange and clearinghouse.

LedgerX is a Designated Contract Market (DCM), Swap Execution Facility (SEF), and Derivatives Clearing Organization (DCO) that caters to both retail and institutional investors and offers physical settlement of all contracts, block trading, and algorithmic trading opportunities for institutional investors.

The firm has also cleared over 10 million crypto options and swap contracts since launching in 2017. LedgerX is a pioneer in bitcoin mini contracts and will continue its current offerings independent of the deal with FTX.

Brett Harrison, President of FTX.US, commented: “This acquisition marks a significant milestone for our rapidly growing US business and is a key part of our strategy to bring regulated crypto derivatives to our US user base.

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“We believe the integration of our technological capabilities, product portfolio, and large balance sheet with LedgerX will enhance our ability to provide innovative products to all US cryptocurrency traders. We’re excited to take this step and work with US regulators to ensure compliance with the existing derivatives licensing regime. We believe it is incumbent upon the industry to be proactive and to seek out working relationships with regulatory groups like the CFTC to help shape the future of our industry.”

Zach Dexter, CEO and Co-Founder of LedgerX, said: “US crypto derivatives is an incredibly underserved market, and it took time and resources for us to become a regulated entity under the existing frameworks. FTX.US has taken the view, which we share, that US regulators are ready and willing to partner on innovative products, and it’s the responsibility of the industry as a whole to step up and work with agencies like the CFTC.”

Combining FTX with LedgerX, the firm will be able to create new products that meet the needs of both retail and institutional traders and develop a strong working relationship with the US regulatory community, specifically with the CFTC.

As regulatory clarity remains an issue within the digital asset ecosystem in the United States, FTX.US stated it “hopes to further drive innovation that is compliant and meets the rigorous standards of the US financial services industry”.

The FTX has recently reduced the maximum leverage allowed on the platform and reported that average daily volume grew by over 150 times when compared to the same time last year with the peak of $993 million coming in a 24 hour period on April 22, 2021.

 

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