The U.S. Commodity Futures Trading Commission has granted ErisX cryptocurrency exchange a derivatives clearing organization (DCO) license under the Commodity Exchange Act (CEA).
ErisX announced the news in a blog post. According to the post, the exchange’s clearinghouse will offer its users the clearing of digital asset futures contracts traded on ErisX’s regulated derivatives market. The market is expected to launch later this year.
The exchange also committed to comply with all the core principles under the CEA. They include “establishing standards and procedures to protect members and participant funds, risk management capabilities and rule enforcement policies.”
The license will enable institutional investors to get into the crypto market, the exchange believes. ErisX will finally have all the tools and infrastructure that these investors are used to in the traditional markets. This will eliminate many of the obstacles they face in the crypto market, the post stated.
ErisX’s business model will drive the market towards greater accessibility, the CEO Thomas Chippas stated. The new license will complement the Designated Contract Market that the exchange has held since 2011.He added:
“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.”
The general counsel at the exchange, Laurian Cristea, noted that the clearinghouse is guided by a regulatory framework that ensures market integrity is upheld and that the investors are protected. These same regulatory principles will apply to the spot market which ErisX launched in April.
The Chicago-based exchange has been working with some of the biggest names in the financial world. These include TD Ameritrade, an online stock trading company. The two companies partnered in a product that seeks to offer crypto trading services to TD Ameritrade’s 11 million customers. In doing so, the company will be encroaching a territory that its fierce rival Robinhood has had immense success in.
Dean Carlson, the head of the digital asset principle investing arm of Susquehana International Group was full of praise for ErisX. He stated:
“ErisX has worked diligently with market authorities to build an environment that follows time-tested processes and guidelines, which is unique to the digital asset space. The frameworks and regulations in place on the ErisX platform ensure not only security and transparency but familiarity in a nascent asset class.”
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