CFTC grants license to ErisX for crypto futures

01 Jul, 2019
by David Robb
Regulation
CFTC grants license to ErisX for crypto futures

The Commodity and Futures Trading Commission has approved ErisX's application to trade cryptocurrency derivatives. Eris Clearing received a derivatives clearing organization (DCO) license under the Commodity Exchange Act (CEA).

This is the second recent positive move from the CFTC in relation to crypto derivatives, following the approval granted to LedgerX to trade physically-delivered Bitcoin futures contracts. Long-awaited institutional crypto platform Bakkt should also be rolling out its own BTC futures sometime this year, but it has struggled to meet regulatory requirements in relation to these, which has been one of the key factors holding back its launch.

ErisX, which is backed by online stock trading platform TD Ameritrade, is now capable of operating a digital asset exchange as well as a clearinghouse for derivative contracts. Receiving the DCO license required the company to comply with 17 core principles of the CEA, "including, among other things, establishing standards and procedures to protect members and participant funds, risk management capabilities and rule enforcement policies".

The company's announcement claims that the derivatives market "will launch later this year", but it's unclear so far when the futures will start trading and what cryptos they will be based on. Alongside the likely Bitcoin derivatives, ETH-based futures are a strong possibility, based on recent correspondence between ErisX and the CFTC back in February. 

According to Laurian Cristea, General Counsel at ErisX, "Our clearinghouse is guided by a long-standing regulatory framework that protects participants and market integrity; and we are applying these same regulatory principles to our recently-launched spot market as well...Obtaining the DCO license is the second key enterprise goal we achieved this year...When futures on digital assets launch later this year we will offer the market a single unified platform for both spot and futures".

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