The US Commodity Futures Trading Commission (CFTC) has granted blockchain startup LedgerX its formal registration as a swap execution facility (SEF), making it the second company ever to be granted the ability to trade digital currency derivatives.

While a notable milestone, it's the latest in a long process for LedgerX that is still far from over. Still pending approval is the final regulatory milestone to launching what could end up being the first cryptocurrency options firm licensed by the CFTC to do business in any number of cryptocurrencies, including bitcoin and ether.

LedgerX CEO Paul Chou told CoinDesk:

Founded in 2013, LedgerX first received a temporary approval to operate as an SEF in 2015, but this latest development makes that decision final. With today's registration, LedgerX is now required to comply with provisions set forth in the Commodity Exchange Act (CEA) and other regulations specific to the CFTC.

New Jersey-based Tera-Exchange was registered as an SEF last year.

As part of the New York-based startup's push to become the first derivatives clearing organization (DCO) registered to trade cryptocurrencies, the firm earlier this year raised $11.4m led by investors Miami International Holdings and Huiyin Blockchain Venture Investments.

As a result of that capital, Chou believes LedgerX is on the cusp of creating a cryptocurrency options market that could increase the number of institutional investors able to invest in the asset class and help stabilize the price of the currency by enabling a more reliable hedges.

"We look forward to working with the CFTC on finalizing the DCO registration," he said.

Editor's Note: This article has been amended to show that Tera Excahnge was registered as an SEF last year.

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