Nadex, the North American derivatives exchange of Crypto.com, has included derivatives contracts associated with memecoins such as FLOKI and PEPE in a recent filing to the US CFTC.
According to the filings, Nadex has also included derivative products associated with Dogelon Mars (ELON) and BONK.
According to CoinMarketCap, the aggregate market capitalization of the four memecoins that underpin Nadex’s contracts is roughly $7 billion.
The contracts are valuable to Nadex’s current portfolio of cryptocurrency derivatives products, including contracts linked to blockchain network tokens like Ether and Bitcoin.
Hedging instruments, known as “touch bracket” contracts, are intended to provide payouts if the current price of a token reaches a predetermined ceiling or floor before the contract’s expiration.
Nadex stated in a filing that Touch Bracket Contracts are not only highly prevalent in markets with high volatility, such as the cryptocurrency markets, but their distinctive structure also inherently reduces the likelihood of contract manipulation.
Crypto derivatives are becoming increasingly prevalent on regulated US exchanges, including well-established trading platforms like the Chicago Mercantile Exchange (CME).
Nasdaq was granted permission by the US Securities and Exchange Commission (SEC) in September to list options that are linked to BlackRockc’s BTC exchange-traded fund (ETF), iShares Bitcoin Trust (IBIT).
The CFTC and other agencies are awaiting ultimate approval of the options.
According to the filing, the total trading volume of Nadex contracts associated with BTC, ETH, and Litecoin in 2023 exceeded 28 million contracts.
Nadex stated that the Exchange is committed to expanding its cryptocurrency commodity derivative product offerings to satisfy the public’s demand for regulated and diverse products.
Derivatives exchanges, including Nadex, self-certify derivatives products that they believe adhere to current regulations. Contracts do not necessitate explicit regulatory sanction before listing.
After winning a significant court case against the CFTC in September, Kalshi, a derivatives exchange, advertised event contracts for betting on the US election results on October 7.
Kalshi expanded its roster of political event contracts on October 8, enabling traders to wager on the resignation of New York City’s mayor, Eric Adams, following his bribery charge in September.
