FTX US Embraces Crypto Regulation with LedgerX Buy
Posted by Colin Lambert. Last updated: September 1, 2021
Cryptocurrency exchange FTX US has reached an agreement for it to acquire Ledger Holdings, the owner of digital assets clearinghouse LedgerX. The deal, terms of which were not disclosed, is subject to regulatory approval.
The firms say the combined entity will leverage its resources to create products that meet the needs of both retail and institutional traders alike. Additionally, it will be devoting significant resources towards developing a strong working relationship with the US regulatory community, specifically with the CFTC (Commodity Futures Trading Commission). “Through this acquisition, FTX US hopes to further drive innovation that is compliant and meets the rigorous standards of the US financial services industry,” the firm says.
The purchased of LedgerX will help with regulatory engagement as it is a CFTC regulated Designated Contract Market (DCM), Swap Execution Facility (SEF), and Derivatives Clearing Organisation (DCO). LedgerX is available to both retail and institutional investors 24×7 and offers physical settlement of all contracts, block trading and algorithmic trading opportunities for institutional investors.
Since its launch in 2017, LedgerX says it has cleared over 10 million crypto options and swap contracts and pioneered the bitcoin mini contracts that enable granular trading. It adds the deal will have no material impact on LedgerX’s operations as it will continue to provide its current offerings to its existing customer base.
“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,” says Ben Harrison, president of FTX US. “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, adds, “US crypto derivatives is an incredibly under-served 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.”