Federally regulated bitcoin exchanges seem to be becoming a trend. Paul Chou, a consultant and former Goldman Sachs trader is readying LedgerX Bitcoin derivatives exchange and clearing house.
LedgerX seems like a service that could help Bitcoin derivatives come a step closer to additional legitimacy by being fully regulated. While working for Goldman Sachs, Chou was responsible for the development of algorithmic strategies for equity trading for U.S. and Japanese markets. He also developed a set of cross-asset strategies and devised a method to unify and optimize the trade flow across hundreds of trading algorithms.
Before his time with Goldman Sachs, Chou delivered trading and spread risk tracking tools on projects for Citadel Investment Group and Morgan Stanley. As the chief executive of officer of LedgerX, Chou filed registration papers, bringing the exchange one step closer to reality. While Chou is working on designing the bitcoin exchange, its registration filed with the CFTC is open for public comments until Friday, January 30th. On December 15th, the CTFC first requested comments on the LedgerX submission.
Much more than just a Bitcoin Exchange
If the registration ends up being accepted by the CFTC, LedgerX is going to be the first federally regulated Bitcoin derivatives exchange and clearinghouse for institutional participants in the US. As well as the first federally regulated Bitcoin options platform and clearing house to list and clear fully-collateralized, physically-settled Bitcoin options for the institutional market. LedgerX also has a pending registration with the CFTC as a swap execution facility (SEF) and derivatives clearing organization (DCO) from September 29, 2014.
LedgerX claims to have recruited big financial industry names to its board of directors. It reportedly raised venture funding from Lightspeed Venture Partners, Google Ventures and others to add a dose of legitimacy to the bitcoin market. Additionally, a former chairman of the CFTC and former chief executive of NYMEX, Jim Newsome and Tom Lewis, former CEO of Ameritrade and Green Exchange, are both currently on the LedgerX board of directors.
Chou is currently working with legal, tax, audit, surveillance and technology companies. Simultaneously, with the goal of creating a regulated Bitcoin exchange and derivatives market in order to ultimately bring financial institutions who haven’t been comfortable with bitcoin so far into the game.
Images from LedgerX.
