LedgerX, an institutional trading platform that hopes to be the first federally regulated derivatives clearing organization for digital-based options, recently received an investment from Miami International Holdings Inc.
MIH invested in LedgerX’s parent company, Ledger Holdings, and received a 10-year, exclusive global right to license equity or fixed income products related to digital currencies developed by LedgerX and to develop its own equity or fixed income derivatives based on such LedgerX products to be listed on MIAX Options and MIAX PEARL, MIH’s second options exchange.
MIH also secured rights for securities to be listed on its MIAX Equities Exchange, MIH’s technology subsidiary. MIAX Technologies and LedgerX will pursue technology support and services opportunities.
LedgerX Seeks CFTC Approval
LedgerX will now seek approval from the U.S. Commodity Futures Trading Commission to register as a derivatives clearing organization and a swap execution facility for options based on digital currency.
LedgerX plans to list and clear fully collateralized, physically settled options on bitcoin and other cryptocurrencies. If approved, LedgerX would be the first federally regulated DCO and SEF allowed to offer both clearing services and a trading facility for options based on digital currency for the institutional market.
“To be involved with a company at the forefront of a new exchange space such as digital currency and to also have secured exclusive product licensing and development rights for the underlying security is a tremendous opportunity, and one we believe will result in a huge competitive advantage for MIAX Options and MIAX PEARL,” said Thomas P. Gallagher, MIH chairman and chief executive officer.
“We are also excited to bring digital currency-based derivatives products to market that will be exclusive to MIAX Options and MIAX PEARL and to pursue other ventures pursuant to the parties’ licensing agreement. Products will initially cover an index centered around the underlying price of bitcoin, a broad-based index on several digital currencies, and a volatility-type index,” he said.
A Critical Capital Infusion
Paul Chou, Ledger Holdings president and CEO, said MIH’s investment provides the capital that is critical to meeting financial requirements needed to be approved as a DCO and SEF.
“This investment not only shows MIH’s confidence in our future growth, but it also gives us access to a seasoned management team in the derivatives exchange space as we prepare to launch LedgerX,” Chou said. “We look forward to a mutually beneficial relationship with MIH for years to come.”
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Last modified: March 4, 2021 4:53 PM