FTX US, the affiliate of Hong Kong-based crypto derivatives exchange FTX, on Tuesday announced that it was acquiring Ledger Holdings Inc., parent company of LedgerX, a digital currency futures and options exchange regulated by the Commodity Futures Trading Commission (CFTC).
Fast facts
- LedgerX is a CFTC-regulated designated contract market (DCM), swap execution facility (SEF) and derivatives clearing organization (DCO). The acquisition looks be a big get for FTX from a licensing standpoint and if completed, will enable FTX US to expand its product offering to include crypto derivatives. The financial terms of the deal were not disclosed.
- “This acquisition marks a significant milestone for [FTX’s] rapidly growing US business and is a key part of our strategy to bring regulated crypto derivatives to our US user base,” said Brett Harrison, FTX US president, in a statement. “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.”
- According to FTX US, the combined entity will serve both retail and institutional traders. The company says it also intends to devote “significant resources towards developing a strong working relationship with the US regulatory community, specifically with the CFTC.”
- Zach Dexter, CEO and co-founder of LedgerX, said in a statement: “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.”
- In an interview with Forkast.News earlier this year, FTX CEO Sam Bankman-Fried said that while there was guidance from a lot of global regulators on spot cryptocurrency products, this was less true for derivatives. “We’re excited for governments to start building out regulatory frameworks and licensing regimes for us to be able to offer that we can acquire for crypto derivatives,” Bankman-Fried said. “That’s going to play a big role in where we shift a lot of our resources to and we’re having a lot of conversations behind the scenes right now and scoping places.”
See related article: How FTX crypto exchange won over 1 million investors and grew 25-fold