Cboe Digital, a major options exchange in the United States, has had its application to offer margin futures contracts for Bitcoin (BTC) and Ethereum (ETH) approved by the US commodity regulator (CFTC).
Cboe Digital Launches Margin Futures For Bitcoin (BTC) And Ethereum (ETH)
While Cboe has been offering crypto futures contracts since December 2017, margin trading was not available to users.
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
With the new confirmation, users will be able to trade Bitcoin (BTC) and Ethereum (ETH) futures with much less than they originally had to deposit.
The approval is also seen as a positive step for Cboe as it will allow traditional financial firms to access crypto futures without intermediaries.
“Herein lies the advantages of having a spot market,” said John Palmer, President of Cboe Digital, in a statement. "We didn't want to force participants to hide or touch the physical asset."
The positive news comes at a crucial time for the industry, as those in the US market continue to face regulatory uncertainty from the US Securities and Exchange Commission.
CFTC Commissioner Christy Goldsmith Romero praised Cboe's approach, emphasizing that other crypto firms should follow Cboe's lead and, above all, adhere to the existing traditional market structure.
“In recent years, crypto firms have often sought to take a business model or market structure that existed in a regulated environment and move it to a regulated environment. The CFTC has no perspective on the risks associated with models or structures in a unregulated environment.”
“Cboe did not do this, but instead operated within the parameters of the traditional futures market structure and regulatory framework,” he added.
Goldsmith Romero said the successful filing "is in stark contrast" to the one the CFTC reviewed prior to FTX's bankruptcy.
*Not investment advice.
