At Wyre, we’re on a mission to help lower the barriers to entry for FinTech entrepreneurs by offering them compliant ports into a regulated fiat world.

As part of this ongoing effort, we have acquired technology, developed by Hedgy, that is a — a smart contract platform built on top of the Bitcoin blockchain.

The Hedgy team built an incredibly powerful product that can unlock a new level of accessibility for financial instruments around the world. In addition to incorporating their technology into our stack for partners and users, I’m pleased to say that Matt Slater (Co-founder, CEO) is joining us as an advisor.

Wyre is in the process of developing services and product offerings that fall within three general categories of regulated activity:

Money Transmission (FinCEN), Active — Sending/Receiving payments for users.

Sending/Receiving payments for users. Securities (SEC), Pending — Buying/Selling security assets for users.

Buying/Selling security assets for users. Commodities and Derivatives (CFTC), Pending — Providing software that allows users to create and execute smart swap contracts and report related data to swap data repositories.

Our acquisition of Hedgy’s platform technology brings us closer to our aim of offering a derivatives software product that is compliant with federal commodity laws and regulations.

In the world of bitcoin, the volatility that the markets have seen is part of the appeal to retail speculators, investors, and professional traders. Over time, we expect to see this volatility cooldown (although it might be a while!). As markets become less volatile, we expect to see an increase in the demand for creative financial products such as crypto asset swaps, options, and futures.

Looking at the FX market, and other more mature asset classes, we see a lot of them have well developed, related derivatives trading. Derivatives involve leverage and afford FX traders with an opportunity to make more efficient use of their capital (but also exposes them to the potential for increased losses or gains).

Bitcoin and other crypto assets are likely to be no different in time, but we feel that it may be some time before volatility settles down enough for derivatives trading to gain significant momentum. In the interim, as markets still carry what is likely to be higher levels of volatility over the longer term, we’re expecting derivatives may have value in several different scenarios such as:

Mining — Organizations guaranteeing prices for 28 / 60 / 90 days. Derivatives may afford miners with an opportunity to avoid the volatility and costs associated with mining that is detrimental to their core business.

— Organizations guaranteeing prices for 28 / 60 / 90 days. Derivatives may afford miners with an opportunity to avoid the volatility and costs associated with mining that is detrimental to their core business. Security Token Offerings — Teams that are raising capital will have the ability to provide transparency publicly to their investors. If a team raises funds and accepts bitcoin, they’ll be able to publicly verify how much is being held, and how much of that exposure has been hedged through the use of derivatives. This transparency may provide investors with greater confidence as to how the teams are managing their balance sheet.

— Teams that are raising capital will have the ability to provide transparency publicly to their investors. If a team raises funds and accepts bitcoin, they’ll be able to publicly verify how much is being held, and how much of that exposure has been hedged through the use of derivatives. This transparency may provide investors with greater confidence as to how the teams are managing their balance sheet. Fund Managers — Fund managers that believe prices may be shifting may use derivative instruments to reduce the risk of adverse price movements relative to the value of their cryptocurrency portfolios.

— Fund managers that believe prices may be shifting may use derivative instruments to reduce the risk of adverse price movements relative to the value of their cryptocurrency portfolios. Hedging Commercial Risk — Businesses that run smart contracts or otherwise require crypto assets to cover transaction costs on a blockchain network can use derivatives to effectively “lock in” the price of these assets. Similarly, businesses that sell crypto assets may use a derivative to offer some downside protection against a decline in the value of bitcoin or ether that they will receive on the token generation event date.

In other words, we believe that there may be compelling use cases for derivatives in current levels of volatility and that there may be an even broader use of derivatives if volatility reduces over time.

Given our expectations for the growth of the crypto derivatives markets, we are excited to fold Hedgy’s technology into the Wyre product offering — and welcome Matt to the Wyre team.

Thank you.

Michael.