The December 21st launch of Malta’s LXDX, a crypto derivatives exchange platform, highlights continued crypto drift in the U.S. If the libertarian values that sparked the advent of the crypto era are still alive, the United States is doing little to undermine the belief that governments stifle innovation and freedom either through repression, over-regulation, or incompetence.
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Malta Takes Off As Crypto Epicenter
LXDX is the latest in a long and growing list of influential companies to have opened in or relocated to the crypto and blockchain friendly jurisdiction. Claiming to be the world’s fastest cryptocurrency exchange, LXDX currently offers trading in bitcoin (BTC), Ripple (XRP), ether (ETH), Tether (USDT), and TrueUSD (TUSD).
The exchange has a strict KYC/AML/CTF Compliance Policy, and claims to offer an enhanced trading experience by improving market liquidity through sophisticated algorithmic smart routing and dark pool trading. LXDX has the backing of Tower Research, DRW, and Laurion Capital.
Derivatives Are Coming… Whether Jay Clayton Likes it Or Not
One might imagine executives at VanEck seething with frustration at the U.S. Securities and Exchange Commission’s seemingly endless series of deliberations and postponements.
In January next year, LXDX is set to introduce LXDX Warrants, their first derivative products. The company describes the forthcoming warrants:
“These unique financial instruments will allow for both leveraged –yet fully collateralized – speculation and hedging, without putting traders at risk of socialized losses.”
The “hedging” function is crucial to acknowledge. Though many people regard derivatives as speculative and manipulative tools institutional investors use to toy with retail investors, they are important methods through which investment companies can manage risk.
As LXDX CEO Joshua Greenwald stated:
“Options facilitate not only the ability to take short positions in cryptoassets, but to express nuanced opinions on the shape of things to come.”
Derivatives are an important component of healthy capital markets. By the time the SEC approves an ETF, they may find there is little demand left for them in the U.S., with all the action having moved to Malta or Hong Kong in the meantime despite the pleas of Wall Street titans.
Have your say. Are crypto derivative markets simply going to be established offshore, avoiding the U.S. altogether?
Images via Pixabay
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