London-based Bitcoin Derivatives Platform Debuts

By Inside Bitcoins Feb 26, 2015 5:33 PM EST

bitcoin derivatives

NEW YORK (InsideBitcoins) — What does it take to launch a bitcoin derivatives platform? In the case of Cryto Facilities, a London-based broker that launched just such a platform yesterday, it takes a former senior trading architecture designer at BNP Paribas/Société Générale and a former executive director in credit quantitative modelling at Goldman Sachs with a PhD in financial engineering.

Crypto Facilities Ltd logoThe platform initially hosts a forward contract on the USD price of bitcoin. The derivative serves to hedge against bitcoin volatility — or to benefit from future swings in the bitcoin price. The firm has developed an integrated risk management, margining and settlement framework tailored to the high volatility of bitcoin.

“Our forward is probably the simplest and most effective tool out there to protect yourself against bitcoin volatility,” said Jean-Christophe Laruelle, co-founder and COO. He’s the former trading architecture designer. “If you want to lock in the value of one bitcoin, you sell one forward – that’s it. At the same time our market is extremely robust and secure. There is no central counterparty and all portfolios are marked to our proprietary bitcoin price indices.”

Timo Schlaefer, co-founder and CEO — he’s the credit quant guy — says the platform is designed to appeal to sophisticated investors and is backed by a high-profile team of experienced professionals from top investment banks and regulatory advisors.

“The bitcoin space still lacks professional, reliable marketplaces, and this is what we provide,” Schlaefer said in a statemetn. “We apply the same standards in terms of risk management, compliance and reporting as you would see in the traditional finance space.”

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