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U.S. Binary Options Exchange Resumes Bitcoin Trading

Last Updated March 4, 2021 4:49 PM
Lester Coleman
Last Updated March 4, 2021 4:49 PM

The North American Derivatives Exchange (Nadex) on Monday resumed the listing of bitcoin contracts after suspending the contracts in February on account of technical difficulties, according to SMN Weekly , which covers forex, binary options, and regulation news.

Nadex image

Nadex, the largest U.S. binary options exchange, has resumed the listing now that it has the Tera Bitcoin Price Index available.

Nadex Held Binary Contracts

On Feb. 9, Nadex advised the U.S. Commodity Futures Trading Commission (CFTC) of its decision to hold its daily and weekly bitcoin binary contracts. The exchange did not have the underlying Tera Bitcoin Price Index market available at the time. The Nadex bitcoin contracts are based on the index.

The resumed listing allows American binary options traders seeking exposure to the volatility of cryptocurrencies to trade again with one of the two legal venues in the U.S for binary options, according to Finance Magnates .

CFTC Registers Entities In May

The CFTC fully registered TeraExchange as a Swap Execution Facilities (SEF) in late May, along with GTX SEF Llc, a unit of FTSEF and Gain Capital, a forex broker. The entities previously operated under a temporary registration status.

The CFTC noted that the three companies demonstrated compliance with the Commodity Exchange Act (CEA) and the commission’s rules regarding SEFs, which is a requirement for obtaining a SEF registration. Entities that receive a registration order must comply with all representations and submissions in support of a registration application.

SEFs are trading facilities operating under the CFTC’s regulatory oversight for processing swaps and trading.

The CFTC in September found TeraExchange guilty of failing to enforce prohibitions on wash trading and prepared trading in bitcoin swap. The entity had offered a non-deliverable forward contract for trading on its SEF based on the relative value of BTC and USD and presented them to traders as pre-operational test trades. It later described them to the public as actual trading in bitcoin swap. The CFTC required TeraExchange to cease from future violations related to obligations to enforce trade practice rules.

Nadex is the North American unit of IG Group, a global brokerage house listed on the London Stock Exchange. CFTC regulates Nadex, a leading U.S. exchange for spreads and binary options. Its platform is available in mobile and web-based versions.

Also read: CFTC to discuss blockchain for derivatives, taps LedgerX’s Chou as advisor

TeraExchange Launches Regulated Platform

TeraExchange introduced the first U.S.-regulated trading platform for bitcoin forward contracts. The Tera Bitcoin Price Index was created as an international benchmark index for USD/bitcoin swap contracts. Tera Group Inc, which provides a multi-asset trading platform for bitcoin interest rates swaps, non-deliverable forwards, derivatives, and credit default swaps, owns TeraExchange.

Images from Shutterstock and Nadex.