The Commodities Futures Trading Commission (CFTC) has approved an expansion of Cboe Digital’s crypto offerings.
Cboe Digital currently offers spot trading on digital assets including bitcoin, ether and litecoin alongside futures trading of bitcoin and ether. Commodities market giant Cboe bolstered its digital asset offerings in 2021 through the acquisition of ErixX, a crypto spot and derivatives exchange. The Cboe Digital service was founded on the principles of a regulated futures exchange and clearing house, according to its website.
The CFTC approved an amended order of registration for Cboe Digital’s clearing service known as Cboe Clear Digital, according to a statement on June 5. This means that it can provide clearing services for digital asset futures on a margin basis alongside the already approved clearing services for fully collateralized digital asset futures and swaps.
The CFTC approved this additional service under the Commodity Exchange Act.
CFTC Commissioner Christy Romero said in a statement that Cboe Digital’s application stood in “stark contrast” to FTX’s previous application, which sought to disintermediate existing market structure models and was never approved by the agency
“Cboe does not seek bespoke regulation that differs from the time and stress-tested traditional market structure,” Romero said. “CBOE’s amended order provides fair competition, without opening the door to novel and complex risks that could flow from an untested market structure.”
Romero made a nod to Cboe’s experience in the commodities market as part of the reason it gained approval. She highlighted that Cboe’s clearinghouse had been registered with the CFTC since 2019 and that Cboe itself had been operating for over 50 years.
“This experience can further serve to limit risk with the financial and human capital, as well as risk management expertise, that Cboe has in executing the responsibilities associated with regulated trading and clearing in other asset classes,” Romero said.
The approval comes as U.S. regulators crack down on crypto firms. The SEC filed a lawsuit against crypto exchange Binance for operating an unlicensed exchange among other charges. This followed a lawsuit from the CFTC, a few months earlier.
The SEC lawsuit touches on the controversial topic of whether digital assets are commodities or securities by listing 12 prominent tokens as securities. Bitcoin and ether, which Cboe offers futures trading for, were not mentioned in the lawsuit.
