SFOX, a California-based crypto prime dealer, announced today that it has executed a crypto non-deliverable forward (NDF) as a bilateral transaction. The firm disclosed about this achievement after it matched, executed and cleared the first-ever crypto NDF contract between London-based crypto Liquidity provider B2C2 and an undisclosed financial institution over its multi-dealer network.
The execution establishes SFOX as the first platform to intermediate between a buyer and a seller in the crypto NDF market and also as the first multi-dealer platform to execute an NDF trade.
Therefore, SFOX is establishing an ecosystem where sellers and buyers can match their interests either on a fully disclosed basis or anonymously both in derivatives and spot.
Crypto NDFs provide synthetic exposure to crypto assets through a standardized instrument. The execution of crypto NDFs is creating a gateway to crypto markets for traditional financial institutions, such as investment banks, that are currently unable to handle the underlying assets.
Traditional banks do not use spot crypto because of challenges such as risk and compliance. So, NDFs give them exposure to the spot market without having to take physical custody of cryptocurrencies.
Robert Catalanello, the Co-CEO of B2C2, stated: “We are thrilled that SFOX is the first central intermediary to an NDF crypto contract transaction. SFOX is unique in its ability to match, execute and clear the new crypto derivative contract over its multi-dealer network. This marks a milestone in crypto’s acceptance by mainstream financial institutions.”
Meanwhile, Shawn Egger, the Global Head of Execution at SFOX, added: "SFOX has created a digital nexus for financial institutions to access connectivity to the deepest pools of crypto liquidity including our newly launched crypto NDF orderbook.”
Providing Access to Capital and Market Liquidity
Founded in 2014, SFOX continues to strengthen institutional crypto-asset trading. It is known for offering deep liquidity, with low slippage, solid technology and has been in the cryptocurrency ecosystem since the early days.
In February 2020, SFOX partnered with B2C2 to provide its high-volume investors, including high-net-worth individuals, asset managers, hedge funds, and family offices, with a new source of liquidity. The partnership marked the first time an over-the-counter (OTC) trading venue was added to the SFOX platform. The addition enabled SFOX clients to benefit from a new source of OTC liquidity together with greater price discovery.
In March 2020, Cooper.co, a crypto custodian and prime brokerage platform, partnered with SFOX to enhance its over-the-counter (OTC) settlement process and expand its liquidity. The collaboration enabled Copper’s institutional clients to access SFOX’s global liquidity pool and price execution platform.
