CFTC Grants Registration to Clearing Agency for Digital Currency

The CFTC granted derivatives clearing organization ("DCO") registration status to LedgerX, LLC ("LedgerX"), a New-York based company that plans to provide clearing services for fully collateralized digital currency swaps. LedgerX will start by clearing bitcoin options.

In connection with an Order granting registration status, the CFTC also exempted LedgerX from certain provisions of CFTC Rules, Part 39, including requirements for daily reporting, sufficient liquid resources and the performance of stress testing. The basis for the exemption is that LedgerX requires full collateralization prior to the execution of any trades. According to the CFTC Order, a contract cleared by LedgerX will be considered "fully collateralized" if, at all times, LedgerX holds sufficient funds to cover the maximum possible loss that a counterparty could incur.

LedgerX is now a registered swap execution facility and DCO (see previous coverage).