Coin Futures and Lending Exchange, or CoinFLEX for short, has announced that it will be offering futures contracts as soon as next month to the Asian market.
The new contracts for Bitcoin, Bitcoin Cash and Ethereum will provide possible leverage of up to 20 times. All futures traded on the exchange will be physically-delivered. Such physical futures contracts are considered to be more valuable, as the value is tied to an underlying asset, rather than fiat currency. This means of compensation, therefore, cannot be manipulated and is thought to add another degree of credibility to the largely unregulated cryptosphere.
The company, owned by a consortium including crypto advocate Roger Ver and Trading Technologies International Inc., started in 2018 as CoinfloorEX, then a unit of the UK Bitcoin exchange Coinfloor. The platform later changed its name to Coin Futures and Lending Exchange, or CoinFLEX.
As Bloomberg reported earlier, Mark Lamb, a co-founder of Coinfloor, will be the chief executive officer of the new business based in Hong Kong.
Crypto derivatives could become an order of magnitude larger than spot markets and the main thing that's holding back that growth is the lack of physical delivery," explained Lamb. "Volumes are reduced because of a problem of trust when it comes to cash-settled trades.
CoinFLEX will have to compete with ICE Inc., the owner of the NYSE, which will introduce a physically delivered futures contract as part of its crypto venture called Bakkt.
Unlike Coinfloor, which has been asking the FCA to regulate it since 2013, CoinFLEX, like BitMEX, will be incorporated in the lightly-regulated Seychelles.
In order to be a large, global exchange focused on traders, the best way to serve the market is to be offshore," commented Lamb. "Since crypto is a global audience and being regulated by one country would restrict who we can deal with elsewhere, we have chosen to be offshore in order to maximize our accessibility and the trust traders place in us.