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LedgerX Announces Bitcoin Options Trading Upgrade

Bitcoin derivatives platform LedgerX is launching a new, simplified interface that lets bitcoin investors earn interest on their holdings.

The new service, announced Tuesday, operates similarly to its existing bitcoin call options with a streamlined user face for investors, according to LedgerX president and chief risk officer Juthica Chou.

Chou explained:

“We’re seeing more and more demand for people who want to earn some sort of interest off their bitcoin and lending is not exactly natural to people – especially lending where they earn their interest back in bitcoin. So we’re seeing participants come back to trading.”

Essentially, participants place a bet on what bitcoin’s price will look like at some point in the future. If the price grows to that level within the time period, the participants recoup their investment. In the event that it doesn’t, participants can sell their coins and receive fiat currency from the profit on that sale.

This is “by far the largest trade that we’ve seen people coming in to do,” Chou said. “I would say that more than half our volume has been in this kind of trade.”

“The contract that people are entering into here is such that they’re selling an upside call option, so probably call it [two times] where bitcoin is now. If bitcoin tanks, they still collect the exact same premium and if bitcoin goes up then they end up selling bitcoin at about [two times],” she explained.

Chou added that “overall, I think the volatility is what impacts us … the more [bitcoin’s price] moves, the more fiat [investors] can collect.”

Only eligible contract participants, as defined by the U.S. Commodity Futures Trading Commission, can trade in these call options, however. Users need to undergo “the same [know-your-customer] and application process as standard LedgerX” participants, said Chou.

She concluded:

“I think given the price action people are going to be more and more interested … we’re very excited, because this is something we’ve seen a lot of on the LedgerX platform.”

Zach Dexter, Juthica Chou and Paul Chou image courtesy Juthica Chou

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Canadian Official Wants Google to Ban Ads for Crypto, ICOs

A senior investigator at the Manitoba Securities Commission in Canada has said that the country’s regulators are “very pleased” with social media giant Facebook’s decision to ban ads for bitcoin and initial coin offerings (ICOs),

Jason Roy, who is also the chairman of Canada’s Binary Options Task Force, said that regulators have been in conversations with Google regarding their concern that “these types of ads are leading people to becoming victims.”

He suggested that Google should take a similar course to Facebook, and restrict ad content for binary options, ICOs and cryptocurrencies.

“There’s just been an explosion of different ICOs and new tokens and crazy offerings. You’re seeing ICOs that are raising large amounts of money and there’s nothing behind them in certain cases, but members of the public are so hyped that they’re throwing money at them,” Roy told The Times of Israel.

Facebook announced its ban on cryptocurrency-related ads in a Jan. 30. blog post. The company’s product management director, Rob Leathern, wrote at the time:

“We want people to continue to discover and learn about new products and services through Facebook ads without fear of scams or deception. That said, there are many companies who are advertising binary options, ICOs and cryptocurrencies that are not currently operating in good faith.”

Roy’s comments to the Israeli news site coincide with with more general regulatory chatter from authorities who are increasingly seeking to reign in cryptocurrencies.

On Tuesday, the chairmen of the U.S. Commodity Futures Trading Commission and the Securities and Exchange Commission testified that ICOs must be treated, and therefore regulated, more like securities than they are at present.

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