Cboe Digital Receives Approval For Margin Trades On Its Crypto Futures Exchange

Cboe Digital, a leading options exchange in the United States, has had its application to offer margined futures contracts for bitcoin (BTC) and ether (ETH) approved by the United States commodities regulator.

While Cboe has offered crypto futures contracts since December 2017, margin trades were not available to users.

With the new approval, users will be able to trade bitcoin (BTC) and ether (ETH) futures, which they initially had to hold in advance.

The approval is also seen as a positive step for the Cboe as it will allow traditional financial firms to access crypto futures without the custody of intermediaries.

“This is where the concept of being a spot market for us also has advantages,” John Palmer, president of Cobby Digital, said in a statement. statement to Bloomberg. “We didn’t want to detain participants or force them to touch physical property.”

The positive news comes at a critical time for the industry, as the US market faces regulatory uncertainty from the US Securities Exchange Commission.

Today the CFTC approved Cboe Clear Digital, LLC to clear margined digital asset futures. learn more: https://t.co/tWLd2F7E2h

— CFTC (@CFTC) June 5, 2023

CFTC Commissioner Christy Goldsmith Romero praised Cboe’s approach, and Stressed on Other crypto firms should follow Cboe’s lead and first and foremost fit within the existing traditional market structure:

“Often in recent years, crypto firms have sought to take a business model or market structure that exists in an unregulated environment and port it to a regulated environment. There is no window of risks.”

“Cboe has not done this, instead operating within the parameters of the traditional futures market structure and regulatory framework,” she said.

Goldsmith Romero said the successful application is “in stark contrast” to the application from FTX that was reviewed by the CFTC prior to bankruptcy.

The commissioner explained that the Cboe’s approval came after the regulator requested additional measures for “significant risk-mitigation” for a number of “increased risks” related to the digital asset market.

The commissioner said one of those measures included stricter cyber security practices.

Want to know more about last week’s staff consultation? Read here how this is the first step for supervision over the growing risk in the expansion of regulated crypto to existing authorities. I support this regulated crypto expansion, as requested by me and with cyber security. https://t.co/KjRkGK3RyP

— Commissioner Christy Goldsmith Romero (@CFTCcgr) June 6, 2023

Connected: CFTC proposes reducing anonymity to manage risks

Gábor Gurbacs, a strategy advisor for stablecoin issuer Tether and investment management firm VanEck, told his 56,400 Twitter followers on June 5 that the approval could be seen as a win for institutions, an investor class that is most likely to invest in Galaxy Digital. CEO Mike Novogratz believes that has contributed. Slow buying in recent months.

I worked with the OCC in the past to get the margin model approved… CFTC waiting to see how the CME contracts work. Obviously they’re doing well… so it looks like approval is back on the table.

— Gabor Gurbacs (@gaborgurbacs) June 6, 2023

Cointelegraph reached out to Cboe for comment but did not receive an immediate response.

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