Roger Ver–Backed CoinFlex Exchange Is Taking Aim at BitMEX
CoinFlex closed a $10 million funding round backed by Polychain Capital and Bitcoin.com chairman Roger Ver, among others.
:format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/BCLNFOJWU5B7PDAS5THACGVSHE.jpg)
A cryptocurrency exchange claiming to settle bitcoin futures contracts physically just landed $10 million in financing from Polychain Capital and Bitcoin.com chairman Roger Ver, among others.
The exchange, CoinFlex, launched in February of this year and says it is the first exchange to close futures contracts in bitcoin as opposed to a cash settlement. Speaking with the South China Morning Post, CoinFlex CEO Mark Lamb said the bitcoin futures market needs physical settlement due to price manipulation.
“Professional and retail traders alike are affected by price manipulation in the cash-settled futures market. In physically delivered contracts, anyone long at expiry receives the underlying bitcoin. There are no formulas involved,” he said.
Experienced traders are taking advantage of the lower bitcoin spot volume versus futures, Lamb says. Physical settlement helps alleviate manipulation.
Lamb told the SCMP that settling directly in bitcoin lowers the opportunity for price manipulation. Lamb says CoinFlex is shooting at top dog cryptocurrency exchange BitMEX, which trades the second most bitcoin futures contracts at $2.86 billion daily in volume.
CoinFlex is not alone in its futures settlement goal, however. Intercontinental Exchange’s Bakkt announced this month testing for its physical settlement of bitcoin futures contracts. The exchange had previously announced its launch this past winter but has faced significant regulatory hurdles. In the United States, Bakkt, Ledger, and ErisX are currently sparring to launch the first bitcoin futures contract settled physically.
Futures image via CoinDesk archives
DISCLOSURE
Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.
The leader in news and information on cryptocurrency, digital assets and the future of money, 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. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.