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NYSE Parent ICE's New Futures Contract Will Deliver Real Bitcoin

Intercontinental Exchange (ICE), the Atlanta-based firm that owns the New York Stock Exchange, announced Friday that it plans to launch a digital assets platform and a bitcoin futures product.

Called Bakkt, the platform will leverage Microsoft’s cloud to build “an open and regulated, global ecosystem for digital assets,” according to a press release. Effectively, it will allow consumers and institutions to trade, store and spend digital assets over a worldwide network.

The company said that it believes that the regulated venues will create new protocols for managing “the specific security and settlement requirements” of cryptocurrencies.

Notably, ICE also plans to offer a one-day “physical” bitcoin futures contract – meaning bitcoin is actually delivered on a specified date, unlike other offerings that are settled with cash. The product is expected to launch in November, pending U.S. Commodity Futures Trading Commission (CFTC) approval, ICE states.

The firm adds that major companies including BCG, Microsoft and Starbucks are providing expertise on risk management and consumer experience for the project.

Jeffrey Sprecher, founder and chairman of ICE, said in the release:

“In bringing regulated, connected infrastructure together with institutional and consumer applications for digital assets, we aim to build confidence in the asset class on a global scale, consistent with our track record of bringing transparency and trust to previously unregulated markets.”

“Bakkt is designed to serve as a scalable on-ramp for institutional, merchant and consumer participation in digital assets by promoting greater efficiency, security and utility,” said Kelly Loeffler, CEO of Bakkt.

The release also indicates that M12, Microsoft’s VC arm, Galaxy Digital, Horizons Ventures, Alan Howard and Pantera Capital are among the firms who have either invested in, or are expected invest in, the project.

NYSE image via Shutterstock

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OKEx Confirms $9M Clawback After 'Enormous' Bitcoin Futures Position Fails

After a user made an “enormous” gamble on bitcoin futures, and lost, Hong Kong-based cryptocurrency exchange OKEx said it is having to claw back millions from counterparties.

The exchange explained on Friday that it force-liquidated an “unusually large” long position of 4,168,515 bitcoin futures contracts held by a client on July 31 after the user declined the exchange’s request to lower the position.

Each futures contract has a notional value of $100, according to OKEx, so the total value of the position was over $400 million.

The platform said it subsequently froze the user’s account and initiated a forced liquidation.

An OKEx spokesperson told CoinDesk that, even with the force liquidation, it has now had to trigger its societal loss risk management mechanism due to “the sheer size of the order.”

After its insurance cover is taken into account, the loss to investors is around 1,200 BTC (around $8,800,000 at press time), which will “split proportionately by all profited traders’ realized + unrealized gains,” the spokesperson said.

OKEx said it had injected 2,500 bitcoins into its insurance fund – worth around $18 million at press time – to limit the damage to traders.

A societal clawback happens when the platform’s insurance fund is not able to cover investors’ total margin call losses. In that case, counterpart investors – i.e. those who have short positions – will have to make up the shortfall.

“When the insurance fund cannot cover the total margin call losses, a full account clawback occurs. In such case, only users who have a net profit across all three contracts for the week will be subject to the clawback,” the exchange explained.

BTC and dollars image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.