According to the announcement made on 20th February, the exchange will offer futures contracts on Bitcoin, BCH, and Ethereum with a 20 times leverage.
In a detailed Medium post, the Hong Kong-based exchange’s CEO Mark Lamb detailed the difference between a traditional futures exchange and a crypto futures exchange. He explained that in a traditional setup, a minimum of 2 or in some cases 3 or 4 intermediaries are involved between the exchange and the customer. Moreover, the futures brokerages and Futures Commission Merchants (FCMs) usually stipulate the offerings to high net worth individuals or professional traders.
However, in the case of a crypto exchange, the process is simplified with the elimination of all the middle players.
“I fell in love with bitcoin because it’s peer-to-peer, open, and transparent,” Lamb noted. “Everyone has the chance to transact on the same network. Anyone who has the tools can run a node and I won’t reject your Proof of Work because you come from a different country, don’t speak my language, or don’t meet a government-set ‘capital requirement’.”
Explaining the structure of the futures instruments, Lamb stated: “Crypto derivatives are built in the same fashion as bitcoin. Virtually anyone can sign up regardless of wealth, geographic location, or whether or not he or she has a bank account.”
CoinFLEX is a spin-off from the UK-based cryptocurrency exchange Coinfloor. The Seychelles-incorporated exchange also attracted some notable names as its promoters including Trading Technologies International, Dragonfly Capital Partners, and crypto trader Mike Komaransky.
The exchange is claiming that it is the first crypto exchange to offer physical delivery of the contracts which will reduce the risk of cash price settlement risk. As mentioned on the website, the platform has kept the taker fee at maximum of 0.03% with 99% multi-signature cold storage.
Though there is significant demand for crypto futures in the Asian market, it is drastically declining in the United States. Earlier this month, Bitcoin futures issued by CBOE and CME Group in the US have registered lowest trading volume in December since its launch.