Major US options exchange Cboe Digital has applied to offer margin futures contracts on bitcoin (BTC) and ether (ETH), and has received approval from US commodity regulators.
Although Cboe has offered cryptocurrency futures contracts since December 2017, users cannot trade on margin.
With the new approval, users will be able to trade bitcoin and ether futures for a fraction of what they initially had to upfront. The approval is also seen as a positive step for Cboe, as it will allow traditional financial firms to access cryptocurrency futures with out intermediary custody.
"That's where the advantage of our concept of having a spot market comes in," John Palmer, president of Cboe Digital, said in a statement to Bloomberg. "We don't want to force participants to have custody or access to physical assets. ” The positive news comes at a critical time for the industry, as US markets continue to face regulatory uncertainty from the SEC. CFTC Commissioner Christy Goldsmith Romero praised Cboe's approach and emphasized that other cryptocurrency companies should follow Cboe' s example and adapt to existing traditional market structures first: “In recent years, cryptocurrency companies have often attempted to take business models or market structures that existed in an unregulated environment and transplant them into a regulated environment. Structural-related risks.”
"Instead of doing this, Cboe operates within the parameters of the traditional futures market structure and regulatory framework," she added. Goldsmith Romero said the successful filing was in "stark contrast" to the ones the CFTC reviewed before FTX's bankruptcy.
The commissioner explained that Cboe's approval comes after the regulator requested additional “key risk mitigation” measures to develop an approach to address several “high risks” associated with the digital asset market. One of the measures includes stricter cybers security measures, the commissioner noted. Gabor Gurbacs, a strategic advisor to stablecoin issuer Tether and investment management firm VanEck, told his 56,400 Twitter followers on June 5 that the approval can be seen as a victory for institutions, which Galaxy Digital CEO Mike Novogratz sees as important for in vestors. to be positive . The category has led to slow buying in recent months.
