Exchange operator Cboe gets nod to launch leveraged crypto derivatives

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NEW YORK, June 5 (Reuters) – Cboe Global Markets (CBOE.Z) said on Monday it has received regulatory approval to offer leveraged derivatives on its digital trading platform, including margin futures. bitcoin and ether physically and financially settled.

The United States Commodity Futures Trading Commission has approved Cboe Digital to be the first regulated crypto exchange and clearing platform in the United States to offer leveraged derivatives when contracts launch in the second half of the year.

Margin contracts will allow users to trade crypto futures while putting less collateral capital up front, with trades executed and cleared by an approved set of member futures commission merchants, Cboe said. based in Chicago. Cboe Digital’s clearinghouse will act as a central counterparty to reduce default risks.

Cboe Digital currently allows Bitcoin and Ether futures trading and clearing on a fully collateralized basis, which means users must provide the full amount of the futures contracts upfront.

“Derivatives are a proven and valuable tool for investors to gain market exposure and manage their risk,” John Palmer, president of Cboe Digital, said in a statement.

Cboe Digital also supports spot trading of bitcoin, bitcoin cash, ether, litecoin and USDC.

On October 20, 2021, Chicago-based Cboe announced plans to buy crypto exchange and clearinghouse ErisX. At the time, the price of bitcoin was over $67,000. The deal was completed in May 2022 and in July, when the price of bitcoin hovered between $20,000 and $25,000, the exchange operator took a $460 million writedown on the platform, qu he had renamed Cboe Digital.

In November, Cboe said 13 companies had taken minority stakes in Cboe Digital, including Robinhood Markets Inc (HOOD.O), Interactive Brokers (IBKR.O), Virtu Financial (VIRT.O), Jane Street, Jump Crypto, DRW, and tastytrade, which belongs to the IG group (IGG.L).

FTX had sought CFTC approval to trade cryptocurrency derivatives directly, but the request was withdrawn when the firm filed for bankruptcy in November.

Reporting by John McCrank; additional reporting by Hannah Lang in Washington; Editing by David Gregorio

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