This week, the CFTC took a bold step forward in terms of granting institutional investors access to the bitcoin market, approving the creation of the first SEF or Swap Execution Facility. Previously, traders who wished to place bets in bitcoin derivatives markets were forced to operate in markets that were strictly OTC. But now the agency has issued a registration order to LedgerX, granting it status with the CFTC as a Swap Execution Facility, in the process approving bitcoin options trading.
SEFs are platforms for swap trading that were created under Dodd-Frank to bring tighter regulatory scrutiny to derivatives markets. By authorizing the first SEF for bitcoin options, the CFTC is effectively clearing the way for institutional traders like hedge funds and CTAs to participate in those markets.
“LedgerX is an institutional trading and clearing platform which has been patiently waiting for full regulatory approval from the CFTC to trade and clear options on bitcoin.
It is now the first federally regulated bitcoin options exchange and clearing house which will list and clear fully-collateralized, physically-settled bitcoin options for the institutional market.
On December 16, 2016, Ledger Holdings and Miami International Holdings, Inc. (MIH), the parent holding company of the MIAX Options Exchange, jointly announced that MIH had completed an investment in Ledger Holdings. Early investors in Ledger Holdings include Google Ventures and Lightspeed Venture Partners.”
Back in May, LedgerX closed an $11.4 million series B financing round led by Miami International Holdings Inc. (MIH) and Huiyin Blockchain Venture Investments. In return, MIH received 10-year, exclusive global rights to license equity or fixed income products related to digital currencies developed by LedgerX and to develop its own equity or fixed income derivatives based on such LedgerX products to be listed on MIAX Options and MIAX PEARL, MIH’s second options exchange.
The CFTC’s approval is hardly a surprise.
According to CryptocoinsNews reports, the CFTC previously appointed Paul Chou, CEO and founder of LedgerX, as a bitcoin trading expert to its technical advisory committee. The committee advises the CFTC on the impact of technology innovations for the securities market and financial services, along with the regulatory and legislative response to the growing use of technology in the markets. So, the head of LedgerX was effectively given unfettered access to lobby the CFTC to grant his own company favorable status.
The CFTC officially recognized bitcoin as a commodity in September of 2015 when it went after Coinflip for operating a platform for trading bitcoin options without the proper authorization. Since the agency effectively asserted its dominance over the bitcoin market with that decision, this is the first time it has given its blessing to an bitcoin optons trading platform. Expect a burst of institutional trading activity to follow.
The thinking here perhaps is that in a market starved for volatility, granting “big boys” the ability to trade with massive leverage on what is already the most volatile asset class in the market, is just what some funds need to make their year as they swing for the fences with 20x (or more in) margin. Instead, we fail to see how this turbocharged volatility – which will result in even more vol in the underlying the same way S&P options “traders” manipulate the underlying index – does not end in tears.Obsessed with Trump and “Russia’s threat,” CNN has downgraded in front of our eyes into a vulgar, lowbrow network. Step by step it is moving to collapse.
Update: In a shocking revelation, The FT reports that hackers responsible for the wave of cyber attacks that struck organisations across the globe used tools stolen from the US National Security Agency.
A hacking tool known as “eternal blue”, developed by US spies has been weaponised by the hackers to super-charge an existing form of ransomware known as WannaCry, three senior cyber security analysts said. Their reading of events was confirmed by western security officials who are still scrambling to contain the spread of the attack. The NSA’s eternal blue exploit allows the malware to spread through file-sharing protocols set up across organisations, many of which span the globe.
As Sam Coates summed up…
NHS hack: So NSA had secret backdoor into Windows. Details leaked few weeks ago. Now backdoor being exploited by random criminals. Nightmare
— Sam Coates Times (@SamCoatesTimes) May 12, 2017
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We earlier reported in the disturbing fact that hospitals across the United Kingdom had gone dark due to a massive cyber-attack…
Hospitals across the UK have been hit by what appears to be a major, nationwide cyber-attack, resulting in the loss of phonelines and computers, with many hospitals going “dark” and some diverting all but emergency patients elsewhere. At some hospitals patients are being told not to come to A&E with all non-urgent operations cancelled, the BBC reports.
The UK National Health Service said: “We’re aware that a number of trusts that have reported potential issues to the CareCERT team. We believe it to be ransomware.” It added that trusts and hospitals in London, Blackburn, Nottingham, Cumbria and Hertfordshire have been affected and are reporting IT failures, in some cases meaning there is no way of operating phones or computers.
At Lister Hospital in Stevenage, the telephone and computer system has been fully disabled in an attempt to fend off the attack.
NHS England says it is aware of the issue and is looking into it.
UK Prime Minister Theresa May confirms today’s massive cyber hit on NHS is part of wider international attack and there is no evidence patient data has been compromised.
— Sky News Tonight (@SkyNewsTonight) May 12, 2017
The situation has got significantly worse as The BBC reports the ransomware attack has gone global.
Screenshots of a well known program that locks computers and demands a payment in Bitcoin have been shared online by parties claiming to be affected.
It is not yet clear whether the attacks are all connected. One cyber-security researcher tweeted that he had detected 36,000 instances of the ransomware, called WannaCry and variants of that name.
“This is huge,” he said.
There have been reports of infections in the UK, US, China, Russia, Spain, Italy, Vietnam, Taiwan and others.
The BBB details a number of Spanish firms were among the apparent victims elsewhere in Europe.
Telecoms giant Telefonica said in a statement that it was aware of a “cybersecurity incident” but that clients and services had not been affected.
Power firm Iberdrola and utility provider Gas Natural were also reported to have suffered from the outbreak.
There were reports that staff at the firms were told to turn off their computers.
In Italy, one user shared images appearing to show a university computer lab with machines locked by the same program.
Bitcoin wallets seemingly associated with the ransomware were reported to have already started filling up with cash.
“This is a major cyber attack, impacting organisations across Europe at a scale I’ve never seen before,” said security architect Kevin Beaumont.
According to security firm Check Point, the version of the ransomware that appeared today is a new variant.
“Even so, it’s spreading fast,” said Aatish Pattni, head of threat prevention for northern Europe.
Several experts monitoring the situation have linked the attacks to vulnerabilities released by a group known as The Shadow Brokers, which recently claimed to have dumped hacking tools stolen from the NSA.It is important to note that Trump was placed in office as a means to scapegoat all conservatives and the principles of sovereignty and limited government for the disasters that will inevitably follow.
In a ‘Crocodile Dundee-esque’ show of “that’s not a nuclear missile… this is a nuclear missile” one-upmanship, US military personnel will test fire the deadly (unarmed) Minuteman III intercontinental ballistic missile between 12:01 and 6:01 a.m. tonight from the north end of the Vandenberg Air Force Base near Lompoc in California.
Col John Moss, 30th Space Wing commander, will oversee the launch of the long range missile, saying:
“Team V is once again ready to work with Air Force Global Strike Command to successfully launch another Minuteman III missile.
These Minuteman launches are essential to verify the status of our national nuclear force and to demonstrate our national nuclear capabilities.
We are proud of our long history in partnering with the men and women of the 576th Flight Test Squadron to execute these missions for the nation.”
Additionally, as The Daily Star reports, after President Trump branded North Korea “a real threat to the world,” Col Deane Konowicz, the 625th Strategic Operations Squadron commander, said the test will send a message to enemies of the US…
“The Simulated Electronic Launch of a Minuteman III ICBM is a signal to the American people, our allies, and our adversaries that our ICBM capability is safe, secure, lethal and ready.
“It highlights the ground and airborne command and control elements of an electrically-isolated ICBM, demonstrating that our deployed ICBMs will respond to critical launch commands.”
The apparent hypocrisy of the escalated sabre-rattling is not lost on many, as The LA Times reports, The Nuclear Age Peace Foundation, a nonprofit, nonpartisan organization, criticized the timing of the launch, citing heightened tension between the U.S. and North Korea.
“When it comes to missile testing, the U.S. is operating with a clear double standard: It views its own tests as justified and useful, while it views the tests of North Korea as threatening and destabilizing,” foundation president David Krieger said in a statement.
“What is needed is diplomacy rather than military provocations. Threats, whether in the form of tweets, nuclear-capable aircraft carrier groups, or nuclear-capable missile launches, only increase the dangers to us all.”
The Vandenberg test would be the second missile launched from the base this year.
Three Minuteman III missiles were launched in 2016, according to Lt. Col. Jason Turner, 2d Range Operations Squadron commander.His recent high tension rhetoric against the Syrian government and against North Korea only seems to confirm my suspicions.If the conflict never reached American soil, there would still be dramatic changes in the way we live right now. Not only would the threat of violence be hanging over our heads – when will an attack happen and will my area be targeted? – but there would be serious economic and supply ramifications.