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CHICAGO, Aug. 13, 2019 (GLOBE NEWSWIRE) -- Seed SEF, the swaps trading platform subsidiary of Seed CX, today announced that user acceptance testing of its physically-settled bitcoin derivatives has begun and will carry on through early August.
Seed SEF has opened its UAT environment to customers to begin trading on Seed SEF’s matching platform.
“We’re very excited to have begun user testing of our physically-settled Bitcoin derivative product,” said Brian Liston, Seed CX co-founder and President. “We’re at the final step. With the successful completion of testing and regulatory review, we will be able to launch a much needed margined, physically-settled digital asset derivative to U.S. customers.”
Seed SEF has been licensed as a Swap Execution Facility by the Commodity Futures Trading Commission since 2016. The platform hopes to permit institutions and sophisticated customers to trade derivatives overlaying digital assets. Seed SEF has been working closely with regulators to ensure that its planned products meet all regulatory requirements.
In most other traditional assets, physically-settled derivative contracts are margined to provide for capital efficiency, however, all digital asset derivatives being traded in the US today are either financially-settled, or fully collateralized.
The bitcoin swap to be listed by Seed SEF will be both margined and physically-settled, which will therefore allow market participants to enter into a leveraged position to buy or sell bitcoin for physical delivery at a later date. Seed SEF will utilize a Value-at-Risk based margin methodology to calibrate initial margin requirements for the product.
Seed SEF plans to incrementally list a combination of weekly and monthly contracts such that at any one point in time there will always be four upcoming weekly contracts, three upcoming serial monthly contracts, and two upcoming quarterly monthly contracts available for trading. Weekly contracts will expire on the Friday of each week. Monthly contracts, including the quarterly monthly contracts, will expire on the third Friday of the month to which the contract relates.
Delivery of Seed SEF’s derivative products will take place through its affiliate, Zero Hash LLC. Zero Hash serves as the calculation agent and delivery facility for a number of trading venues, including Seed SEF. Seed CX recently announced that Zero Hash has been granted a virtual currency license by the New York Department of Financial Services.
About Seed CX
Through its subsidiaries, Seed CX offers a market for institutional trading and settlement of spot digital assets, and plans to offer a separate market for CFTC-regulated derivatives. Seed CX is backed by Bain Capital Ventures, and was recently voted “Best Institutional Digital Asset Provider” by the Profit & Loss 2019 Readers’ Choice Awards. The Readers’ Choice Awards also named Zero Hash, Seed CX’s custodian subsidiary, “Innovator of the Year.” Furthermore, Seed CX secured the award for “Best Cryptocurrency Exchange” in the 2019 FinTech Breakthrough Awards, and earlier this year, Seed CX cofounders Edward Woodford and Brian Liston were named Forbes 30 Under 30 for Enterprise Technology 2019.
Seed Digital Commodities Market is a spot exchange for digital asset commodities and holds a virtual currency license from NYDFS
Zero Hash is a FinCen-regulated Money Service Business and FX Dealer as well as a Money Transmitter in more than 30 states. Zero Hash custodies both fiat and digital assets, with on-chain settlement. Zero Hash holds a virtual currency license from NYDFS.
Seed SEF is a CFTC-regulated Swap Execution Facility (SEF) that plans to offer a market for CFTC-regulated digital asset derivatives.
Seed Digital Securities Market is pending registration as a Broker Dealer with FINRA and an ATS with the SEC.
Hunter Stuart, email@example.com