US-based cryptocurrency exchange ErisX has received a derivatives clearing organization (DCO) license from the Commodity Futures Trading Commission (CFTC).
Granted under the Commodity Exchange Act (CEA), this will allow the exchange to offer digital asset futures contracts to its clients. The exchange already holds a designated contract market (DCM) license, and this new one will act as a supplement to that.
The official announcement from June 2, however, did not specify any timeline for the launch of the futures instruments, while mentioning that the crypto derivatives products will be launched “later this year.”
Commenting on the new licensing, Thomas Chippas, chief executive of the exchange, said: “ErisX is unique in that for our digital asset market, we have divided the trading and settlement functions using traditional DCM (exchange) and DCO (clearing) models. This reflects the structure that institutional investors expect from other asset classes and will help drive these markets toward greater relevance and accessibility.”
2020 Trading Cup Gets Off to a Flying StartGo to article >>
Unlike most of the derivatives markets, ErisX’s products will be physically settled, that means, traders will receive Bitcoins in delivery of the contract instead of an equivalent amount of fiat. Last month, LedgerX received a license from the same regulator to offer physically-delivered Bitcoin derivatives.
“Under the DCO order, Eris will be authorized to provide clearing services for fully-collateralized virtual currency futures. Eris’ indirect parent company, Eris Exchange, LLC, is registered with the CFTC as a designated contract market,” the CFTC noted in a press release.
Spot and futures trading on the same platform
In April, the Chicago-based exchange launched a spot trading platform for digital assets, which offers fiat-crypto trading with Bitcoin, Bitcoin Cash, Ether, and Litecoin. Though its offerings are limited compared to its competitors, the exchange is now bringing futures trading on the same platform.
The company also attracted the attention of investors last year when it raised $27.5 million in its Series B funding round led by TD Ameritrade. According to CrunchBase, it received a total of $47.5 million in funding.
“Obtaining the DCO license is the second key enterprise goal we achieved this year, after launching our spot market. When futures on digital assets launch later this year we will offer the market a single unified platform for both spot and futures,” Laurian Cristea, General Counsel at ErisX, added.