CFTC Will Oversee First Bitcoin Derivatives Contracts

The first CFTC-regulated contracts for bitcoin derivatives and a spot bitcoin price index, both of which were developed by the CFTC-registered SEF TeraExchange, are on path to begin trading, as they have been certified by TeraExchange pursuant to CFTC Rule 40.2

According to TeraExchange, the bitcoin derivative and Tera Bitcoin Price Index were created to meet the "growing demand of global merchants, payment processors, miners, and hedge funds for an efficient hedging tool." TeraExchange said that it worked with the CFTC for over six months to ensure that the swap and the index met all requirements for regulation.

The Tera Bitcoin Price Index employs an algorithm that compiles and filters data on a real-time basis from a number of widely used global bitcoin exchanges.To be included in the index, TeraExchange explained, exchanges are required by the CFTC to execute and maintain an information sharing agreement. TeraExchange is the index administrator and calculation agent.