Crypto Exchange OKEx Launches Token-Based Exchange Traded Fund

Announcements, Investing, News | June 5, 2018 By:

Cryptocurrency exchange OKEx has launched a crypto index fund that will give investors exposure to a basket of six cryptocurrencies.

OKex is one of the largest exchanges in the world, claiming to handle over $1 billion worth of daily trades. It is the international counterpart to defunct Okcoin, which ceased operations last year because of a Chinese government ban on crypto-to-fiat trading. OKEx provides fiat-to-cryptocurrency, cryptocurrency-to-cryptocurrency, and derivatives trading services to global customers.

The new product, called OK06ETT, will replicate the performance of six cryptocurrencies that are traded on the OKEx platform against Tether (USDT), a US dollar-pegged cryptocurrency. At launch, it will include bitcoin (BTC), ethereum (ETH), Bitcoin Cash (BCH), EOS and OKEx’s own token OKB.

“OK06ETT will be available for subscription by USDT in the initial issuance,” the company said. “Users will be required to set the reservation time and amount. After all the reservations are full, the system will count the number of valid subscription orders. Then, it will calculate the units of ETT each user can get based on the net asset value (NAV) at the scheduled settlement time, charge the amount already on hold, and credit the units into the users’ accounts.”

Investors can also redeem the fund for the underlying assets, which prevents its share price from diverging too far from the fund’s NAV. Currently, redemption in underlying will be performed instantly, while redemption in USDT will be performed every hour.

The announcement comes just days after Huobi, the third largest cryptocurrency exchange by trading volume, also launched its own cryptocurrency exchange-traded fund, which will be based on its Huobi 10 benchmark index. Similar to Huobi’s policy, OK06ETT will be open to retail investors eligible to trade on OKEx, and the minimum investment will be set at approximately $100.