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MIH invests in LedgerX Holding Company; secures exclusive product licensing rights for digital currency derivatives
Miami International Holdings, Inc. (MIH), the parent holding company of the MIAX Options Exchange, and Ledger Holdings Inc., the parent holding company of LedgerX LLC, have jointly announced that MIH has completed an investment in Ledger Holdings.
MIH also played a key role in bringing together a consortium of other investors who have co-invested with MIH in Ledger Holdings. Early investors in Ledger Holdings include Google Ventures and Lightspeed Venture Partners.
LedgerX, an institutional trading and clearing platform, will promptly seek approval from the U.S. Commodity Futures Trading Commission (CFTC) to be registered as a derivatives clearing organization (DCO) and a swap execution facility (SEF) for options based on digital currency. If approved, it would be the first federally regulated DCO and SEF permitted to offer both a trading facility and clearing services for digital currency-based options for the institutional market.
"MIH's investment provides us the capital that is critical to help us meet minimum financial requirements necessary to be approved as a DCO and SEF by the CFTC, and we are thrilled to call MIH one of our key investors," said Paul Chou, President and Chief Executive Officer of Ledger Holdings. "This investment not only shows MIH's confidence in our future growth, but it also gives us access to a seasoned management team in the derivatives exchange space as we prepare to launch LedgerX. We look forward to a mutually beneficial relationship with MIH for years to come."
According to the official release, LedgerX's initial plan is to list and clear fully collateralized, physically settled options on bitcoin and other forms of digital currency.
In addition, the parties have also signed an agreement, which gave MIH a 10-year, exclusive worldwide right to license equity or fixed income products related to digital currencies that are developed by LedgerX and to develop its own equity or fixed income derivatives products based on such LedgerX products to be listed on MIAX Options and MIAX PEARL, MIH's second options exchange. MIH also secured similar rights for securities to be listed on its MIAX Equities Exchange, once launched.
MIAX Technologies, MIH's technology subsidiary, and LedgerX will pursue technology support and services opportunities per the terms of their agreement.
"MIH is pleased to be partnering with Ledger Holdings as it seeks approval from the CFTC for LedgerX to become the first U.S.-regulated combined digital currency derivatives exchange and clearing house," said Thomas P. Gallagher, Chairman and Chief Executive Officer of MIH. "We are also excited to bring digital currency-based derivatives products to market that will be exclusive to MIAX Options and MIAX PEARL and to pursue other ventures pursuant to the parties' licensing agreement. Products will initially cover an index centered around the underlying price of bitcoin, a broad-based index on several digital currencies, and a volatility-type index."
Continued Gallagher, "To be involved with a company at the forefront of a new exchange space such as digital currency and to also have secured exclusive product licensing and development rights for the underlying security is a tremendous opportunity, and one we believe will result in a huge competitive advantage for MIAX Options and MIAX PEARL."