In a bullish step toward building positive regulations, crypto exchange Bullish has announced its partnership with the Gibraltar Government and the Gibraltar Financial Services Commission (GFSC) to develop a debut regulatory framework for post-trade operations involving crypto derivatives.
In other words, as mentioned in a press release by Bullish, the world’s first regulatory framework will be developed to clear and settle “derivative contracts settled in virtual assets”. With the launch of the legal framework, a recognized clearing house will clear and settle the crypto derivative contracts in virtual assets.
For the newbies, a crypto derivative is a financial contract that has its value connected to an underlying crypto asset. For example, an underlying asset can be a crypto like Bitcoin, and the derivative contract can be a Bitcoin Futures Contract.
Responding to the collaboration, Bullish Group CEO Tom Farley noted that currently, there are no existing regulations that particularly address the clearing requirements of the crypto industry. He further added: “We aim to change that by introducing a framework that manages risk for virtual asset trading and is aligned with traditional market infrastructure standards”.
While major financial regulations European Market Infrastructure Regulation (EMIR) and Dodd-Frank, and financial institutions, Central Counterparties (CCPs), brought “robust risk management and regulatory oversight” in the traditional derivative markets, Bullish and Gibraltar’s partnership will bring the same supervision, but in the crypto space.
Meanwhile, the crypto exchange has plans to launch its Clearing Services that offer Options trading by year-end. These efforts will help Bullish integrate a variety of clearing benefits that would directly assist the exchange in launching an independent clearing house that follows new regulatory frameworks.
