Amid Crypto Chaos, CFTC Approves Cboe For Futures Margin Trade

Cboe Digital has CFTC permission to provide clearing services for margin trade on crypto futures at a time when regulators are closing in

article-image

JHVEPhoto/Shutterstock modofied by Blockworks

share

The Commodity Futures Trading Commission (CFTC) has given the green light for Cboe Global Markets to offer crypto more products as a derivatives clearing organization under the Commodity Exchange Act.

Cboe Digital, a platform that handles crypto spot and crypto derivatives markets, received the go-ahead to provide leveraged derivatives once the contracts are introduced in the latter half of the year.

The updated order allows Cboe Clear to offer clearing services for digital asset futures on a margin basis to futures commission merchants. This is in addition to the previously authorized fully collateralized futures and swaps, according to a Monday statement.

Cboe Digital also supports spot trade for cryptocurrencies including bitcoin (BTC), bitcoin cash (BCH), ether (ETH), litecoin (LTC) and USDC.

CFTC Commissioner Christy Goldsmith Romero said the updated registration order lets Cboe clear more crypto futures contracts, while implementing careful risk-reducing measures.

Cboe’s application is quite unlike FTX’s application for a direct-to-customer market structure without any middlemen, according to Romero. FTX’s application was withdrawn after the company filed for bankruptcy in November.

“The proposed FTX model was never adopted by the Commission, but it put at risk customers’ bankruptcy priority, other customer protections, and financial stability,” she said.

Cboe’s clearinghouse has been registered with the Commission since 2019. Its parent company Cboe, headquartered in Chicago, has over 50 years of experience running exchanges in regulated futures, options, foreign exchange, and equities markets, she added.

Shortly after acquiring crypto exchange and clearinghouse ErisX last year, Cboe Digital partnered with companies like Jump Crypto, Interactive Brokers, and Robinhood to expand its digital asset business.

“We’ll integrate only where it makes sense, but we realize that in this asset class we need to move quickly,” Cboe COO Chris Isaacson told Blockworks after the closing of the ErisX deal. “Keeping that agility with this wholly-owned subsidiary is a great move.”  

Cboe said it intended to create a digital advisory committee composed of the partner firms.

There’s currently $11.95 billion in bitcoin open interest and $6.17 billion in ether open interest across 12 platforms, excluding Cboe Digital’s ErisX, per CoinGlass.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

ao cover.jpg

Research

Arweave recently launched the testnet for AO computer, a new messaging protocol that will sit atop a PoS network and aims to become a scalable global compute platform through parallel processing and modularity.

article-image

I spend an unhealthy amount of time thinking about crypto securities law — and I can’t see how ETH is now a securities offering under Howey

article-image

Regulators in South Korea, Japan and Singapore could follow Hong Kong’s lead as Asia responds to spot bitcoin ETF approval in the US

article-image

Martin Grant worked with the Fed for roughly 30 years before leaving his position in 2022

article-image

BitGo CEO Mike Belshe shared his thoughts on the halving and bitcoin ETFs in an interview with Blockworks

article-image

Crypto markets were largely the only ones open over a tense weekend, and they took a beating for it

article-image

Though some expect most public miners to survive the halving, the segment’s most vulnerable could fall victim to consolidations and defaults