Cryptocurrency trading startup ErisX has received the regulatory approval from the U.S. Commodity Futures Trading Commission (CFTC) to offer Bitcoin-backed futures contracts to investors. The fintech firm announced in a Medium post published on July 2, 2019.
ErisX Bags Coveted License
ErisX, a cryptocurrency trading platform backed by the likes of Fidelity Investments and Nasdaq, has been granted a derivatives clearing organization (DCO) license under the U.S. Commodity Exchange Act (CEA). With this, ErisX will now be able to offer investors digital asset futures contracts on its upcoming derivatives trading platform scheduled to go live later in 2019.
Per a press release issued by the CFTC, ErisX is now authorized to offer clearing services “for fully-collateralized virtual currency futures.” The statement also mentions that ErisX’s indirect parent firm – Eris Exchange LLC – is registered with the regulator as a designated contract market.
Successfully bagging the regulatory license also brings with several responsibilities for ErisX. As a compliant member of the futures contracts trading market, ErisX will comply with the CEA’s core principles including establishing standards and procedures to protect members and participant funds, risk management capabilities, and rule enforcement policies.
Commenting on the development, Laurian Cristea, General Counsel at ErisX, said:
“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, 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.”
The Institutional Space Heats Up
The stamp of approval for ErisX’s digital currency futures contracts comes just a few days after the U.S. CFTC approved market rival, LedgerX’s designated contract market (DCM) license. Per sources in the know, LedgerX is expected to roll out its BTC derivatives contracts in July 2019.
On a similar note, the Intercontinental Exchange’s highly-anticipated cryptocurrency trading platform Bakkt is also expected to begin testing its physically-settled Bitcoin futures very soon, indicating a general rise in institutional interest in the space commensurate with the current upward trajectory displayed by the market.