#Bitnomial #Digital Asset Derivatives #CFTC

Bitnomial to Launch Revolutionary Clearinghouse

In an exciting move for the digital assets space, Bitnomial, Inc. has officially announced the upcoming launch of the Bitnomial Clearinghouse, LLC (BNCH) on January 30, 2025. Operating within the regulatory framework of the CFTC, this new entity will be the fourth clearinghouse in the U.S. to handle margined, physically-settled, and cash-settled derivatives contracts, marking a significant step forward in the rapidly evolving landscape of digital asset derivatives.

Setting a New Standard

The inauguration of BNCH is not just a milestone for Bitnomial, but it represents a transformative moment for the entire $100 billion global crypto derivatives market, which has primarily functioned in offshore environments. The current infrastructure challenges have made it difficult for liquidity providers and traders to effectively hedge their digital asset portfolios due to high costs associated with traditional clearing systems. For instance, legacy systems often do not acknowledge spot positions, leading to inefficiencies that this new clearinghouse aims to eliminate.

CEO Luke Hoersten emphasized that while Bitnomial's initial exchange and brokerage operations have established its foundation, the clearinghouse represents the culmination of the company’s long-term vision. “For the first time, we will provide a fully operational, end-to-end ecosystem that redefines how derivatives are traded, cleared, and settled within a U.S.-regulated framework, upgraded to digital asset infrastructure,” Hoersten stated.

Transition Timeline and New Offerings

As Bitnomial prepares for the launch, it has initiated a planned wind-down of its legacy-cleared products. Notably, all existing contracts will expire on January 29, 2025, and new offerings will be available on the clearinghouse starting the next day. BNCH will initially facilitate trading in Bitnomial's core products, such as physically settled Bitcoin futures and options, as well as the recently introduced Hashrate futures.

In a bid to bolster its risk management capabilities, Bitnomial has also appointed Amy McCormick as the Chief Risk Officer for BNCH and Dave Bock as the Director of Enterprise Risk Management at Bitnomial, reinforcing its commitment to maintaining high standards of operational integrity and client safety.

Addressing Industry Challenges

One of the principal motivations behind establishing BNCH is to tackle the challenges that have historically impeded the digital asset market. The high margin requirements associated with new products like Hashrate futures have been a stumbling block for potential investors in the mining sector and related industries. BNCH is positioned to remedy this by reducing margin rates significantly, thus enhancing accessibility and adoption for institutional participants.

Michael Dunn, President of Bitnomial Exchange, articulated the necessity of the clearinghouse, noting that the traditional clearing infrastructure was unable to meet the evolving needs of the digital assets market. **“Our clearinghouse will accept digital asset collateral to margin futures and options trading, which is unprecedented in the U.S.,