CFTC approves Cboe Clear Digital for margined digital asset futures

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The U.S. derivatives markets watchdog has approved Cboe Clear Digital to clear additional digital asset products as derivatives clearing organization.

Today the CFTC approved Cboe Clear Digital, LLC to clear margined digital asset futures. Learn more: https://t.co/tWLd2F7E2h

— CFTC (@CFTC) June 5, 2023

“The amended order permits Cboe Clear to provide clearing services for digital asset futures on a margined basis for futures commission merchants, in addition to the fully collateralized futures and fully collateralized swaps previously authorized,” the Commodity Futures Trading Commission (CFTC) stated.

Cboe Global Markets is a global leader in the derivatives market and the largest options exchange in the United States. Recently, it has ventured into the digital asset sector, targeting institutional investors. Last year, it acquired ErisX, a CFTC-registered derivatives firm, rebranding it to Cboe Digital. It then partnered with several partners to expand its ‘crypto’ offering, including Jane Street, Robinhood (NASDAQ: HOOD), and Jump Crypto.

In a statement, CFTC Commissioner Christy Goldsmith Romero expressed her support for the registration. While reviewing the application, Romero requested additional measures for critical risk mitigation, which Cboe had complied with, she stated:

“I appreciate the staff and Cboe constructively engaging with my office to accommodate my changes to the Order and Cboe’s rulebook, policies, and practices to strengthen cybersecurity and promote market integrity.”

CFTC quickly approved the expanded registration for Cboe as its products fall within the traditional derivative markets structure, she added. This structure offers extra protection for customers, including bankruptcy protection, and has weathered storms such as the 2008 financial crisis and the pandemic.

Cboe’s application stands in stark contrast to FTX’s, she said. The collapsed exchange proposed a disintermediated direct-to-consumer offering which the CFTC had yet to approve by the time the exchange went belly up.

The CFTC continues to be the industry regulator for digital asset derivatives, an industry that records significantly higher volumes than the spot market. However, the regulator has been pushing to regulate the entire market, pitting it against the SEC in a battle for ‘crypto.’ While the SEC has a higher profile in the industry—it recently sued Binance and already has an ongoing landmark lawsuit against Ripple—the CFTC has garnered the support of some legislators in the U.S. Congress.

Watch: U.S. Congressman Bill Foster on BSV Blockchain Association’s Blockchain Policy Matters