Bitnomial has obtained the green light from the CFTC to launch Bitcoin settled futures and options contracts (BTC)
Chicago-based cryptocurrency exchange Bitnomial has received the go-ahead from regulators to offer bitcoin futures and option contracts to be physically liquidated. CFTC emitted an "Appointment Order" for the exchange, thereby giving you the status of a designated contract market beginning Tuesday, April 20.
According to a Press release On April 20, 2020, Bitnomial was approved to run a United States Futures and Options Exchange as a Designated Contract Market (DCM). This means that the exchange can now offer options and futures contracts to be settled with physical bitcoin upon expiration of a contract, rather than cash.
By offering margin and physically settled futures and options contracts, Bitnomial becomes "The first and only startup exchange to achieve these capabilities." The exchange will begin user acceptance testing on April 27 and customers can register to participate in the process.
Bitnomial founder and CEO Luke Hoersten noted that the exchange will offer a treasure trove of interrelated products that will start with quarterly futures, micro futures and options. In addition, all of their products will be marketed first with a 37% margin and will be liquidated in the chain instead of the book entry.
Cryptocurrency investment leader at Jump Capital Peter Johnson argued that crypto derivatives are gaining ground in the crypto industry, but physically delivered derivatives are still inaccessible to a large portion of U.S. merchants.
“Bitnomial Exchange enables US merchants to gain exposure to bitcoin in a safe, regulatory and capital efficient manner. These products are also reliably linked to the price of the underlying asset through the physical delivery option. We are excited to be partners with a company that is committed to meeting the highest regulatory standards and increasing the accessibility of cryptocurrency derivatives to US merchants. ”
Bitnomial history and entry to the Bitcoin derivatives market
Founded in 2014, Bitnomial submitted a request to run a cryptocurrency exchange two years after its establishment. CFTC finally approved the request four years later, in April 2020.
In December 2019, the exchange raised $ 7.5 million in equity funds from a total of 12 investors, including Jump Capital, Coinbase Ventures, and DV Chain. Bitnomial is now the latest CFTC approved exchange to offer bitcoin derivatives.
Meanwhile, the exchange is joining major players like ErisX, Bakkt, LedgerX, and CME who are already offering bitcoin futures and options contracts. In particular, ICE's Bakkt was the first to launch physically delivered bitcoin futures contracts in September of last year.