LedgerX has selected Ancoa to provide the first real-time market and trade surveillance platform for monitoring bitcoin options trading on LedgerX.
Using the Ancoa platform, LedgerX will be able to instantaneously identify and investigate manipulative behaviors and suspicious trading practices on its own exchange, across other derivatives exchanges and across the multitude of bitcoin spot markets.
Ancoa, the London-based provider of contextual surveillance and insightful analytics for exchanges, regulators and buy and sell-side firms, helps financial services firms take full control of their regulatory, reputational and operational risks across markets, functions and asset classes.
Ancoa’s independent and real-time approach to monitoring, analytics, alerting and reporting enables compliance professionals to identify and manage potential risks of market abuse, fraud and operational shortcomings on a single platform.
LedgerX, the New York-based firm managed by investment banking, technology and regulatory professionals, is currently awaiting regulatory approval from the U.S. Commodity Futures Trading Commission (CFTC) to operate the first U.S. regulated exchange and clearing house for trading bitcoin options.
LedgerX applied for registration with the CFTC as a swap execution facility (SEF) and derivatives clearing organization (DCO) on September 29, 2014. If approved, LedgerX would be the first federally regulated bitcoin options exchange and clearing house to list and clear fully-collateralized, physically-settled bitcoin options for the institutional market.
The LedgerX management team is comprised of Goldman Sachs, MIT and CFTC alumni, who bring financial expertise, technical talent and regulatory experience to the firm.
Industry icons Jim Newsome, former Chairman of the CFTC and former CEO of NYMEX, and Tom Lewis, former CEO of Ameritrade and former CEO of Green Exchange, currently sit on the LedgerX board of directors. Early investors include Google Ventures and LightSpeed Ventures.
Upon approval, eligible participating institutions can use the LedgerX platform to obtain and hedge bitcoin using exchange-traded and centrally-cleared options contracts.
“Comprehensive market and trade surveillance capabilities are integral to operating a regulated exchange,” said Paul Chou, Chief Executive Officer of LedgerX.
“Furthermore, to meet the complex needs of an evolving bitcoin market and to support our sophisticated exchange platform, LedgerX requires an agile surveillance system built on the latest technology,” continued Chou.
“Together with our experienced team, the Ancoa platform will provide the surveillance needed to ensure a fair and orderly bitcoin options marketplace.”
Commenting on the release, Stefan Hendrickx, Founder and Executive Director of Ancoa, said: “There is clear regulatory appetite for greater transparency and investor protection in bitcoin markets. LedgerX’s best-in-class technology and innovative products, paired with our surveillance capabilities, will support LedgerX’s goal of running a robust, federally regulated bitcoin options exchange and clearing house.”