The US Commodity Futures Trading Commission has quietly approved an institutional crypto derivatives platform for margin futures.
On June 5, the CFTC announced that it had approved a modified registration order for Cboe Clear Digital LLC.
The company, also known as Cboe Clear, was given permission to “clear additional products,” it said. Furthermore, the Derivatives Clearing Organization (DCO) must operate in accordance with the Commodity Exchange Act.
Cboe Crypto Futures are the go-to
These “additional products” are cryptocurrency futures contracts, according to advertisement.
“The amended order allows Cboe Clear to provide clearing services for futures contracts for digital assets on a margin basis to commission forward commission dealers, in addition to previously authorized fully secured futures contracts and fully secured swaps.”
Margin cryptocurrency futures contracts allow institutional traders to trade cryptocurrency futures contracts with less guaranteed capital upfront.
In addition, trades are executed and settled through an approved group of forward commission dealers. The Chicago Board Options Exchange clearinghouse will act as a central counterparty to reduce the risk of default.
John Palmer, President, Cboe Digital, said:
“Derivatives are a valuable, time-tested tool that enables investors to gain market exposure and manage their risks.”
Cboe is among the many applicants for cryptocurrency exchange traded funds (ETFs). The US Securities and Exchange Commission (SEC) has rejected all spot ETF applications to date.
Only institutions are welcome on Crypto?
The approval comes at a time when scrutiny of the cryptocurrency industry in the United States has reached peak levels. It might be a message that only wealthy institutional investors are welcome. Regulators are trying hard to crush anything retail traders have access to, and Binance is the latest.
Pointing out the corporate angle, Gabor Gorbaks, Van Eyck’s strategy advisor pointed out, comment:
“While everyone was stuck in the Binance SEC, state institutions got into a chat, without people noticing.”
Gurbacs worked with the OCC (Office of the Comptroller of the Currency) to get the margin model approved. “The CFTC has been waiting to see how the CME contracts work,” he said.
“They’re obviously doing well so it looks like approvals are back on the table.”
the NYDFS licensed Cboe Digital brings together the spot and futures markets into a single platform. Its spot marketplace currently offers trading in Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and USDC, as of June 4. blog post.
In addition, the futures exchange is preparing to launch physically delivered and cash-settled contracts for both BTC and ETH.
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