ErisX: Who’s Backing It, and What Its Rise Means for Crypto Derivatives
The latest challenger among mainstream-minded cryptocurrency exchanges is ErisX. Backed by heavyweights like Cboe Global Markets Inc., TD Ameritrade, and more, ErisX will gun to translate its experience in regulated markets to the cryptoverse in offering cryptocurrency-based “spot and futures contracts on one platform.”
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ErisX: From Regulated Swaps to Crypto Contracts
On Wednesday, October 3rd, a series of strategic investments into ErisX were announced amid the exchange’s new pivot toward cryptocurrency derivatives.
Brokerage powerhouse TD Ameritrade and exchange holding titan Cboe headlined the investors, which also included among their lot Susquehanna International Group and the Digital Currency Group.
— Erik Voorhees (@ErikVoorhees) October 3, 2018
Initially formed in 2010 as a platform for cash-settled swap futures, ErisX’s Board of Directors approved the exchange’s operational shift toward cryptocurrencies in Q3 2017.
Looking forward, the refocused platform’s leadership — spearheaded by former Citigroup exec Thomas Chippas — anticipates receiving recognition from the U.S. Commodities Futures Trading Commission (CFTC) on ErisX being a Derivatives Clearing Organization (DCO) as early as Q1 2019.
If said DCO status is achieved per that timeline, ErisX will look to launch cryptocurrency-centric spot contracts in the spring of 2019, with physically-settled crypto futures then expected out before that year’s end.
Looking at What’s to Come
Courtesy of CFTC guidance in December 2017, bitcoin futures now have their first few months of existence under their belts in the United States.
And while ether futures look to be independently nigh, if ErisX has its way, futures and spot contracts could be coming to cryptocurrencies beyond BTC and ETH, like bitcoin cash and litecoin, in short order.
That’s because ErisX has said these are the four assets that will be initially supported for “trading, deposits and withdrawals” on their platform. As such, these assets would seem to be where the exchange wants to build out its crypto derivatives first.
And with a new federal ruling asserting that virtual currencies are commodities in the U.S., giving the CFTC entrenched regulatory purview over America’s nook of the cryptoverse, it looks like such futures are indeed a matter of when, not if.
In the case that ruling came from, the CFTC had argued cryptocurrencies were commodities since bitcoin futures had actualized, with the commission pointing to futures in general as being inherently linked to commodities.
And since the CFTC has brought an open mind to bitcoin futures and to cryptocurrencies in general, and with their newly expanded purview, there’s reason to believe the body will play a critical role in widening up the space for crypto derivatives in America. ErisX may have entered the scene at the perfect time accordingly.
What’s your take? Can ErisX rise to the top of the pack, or will the competition be increasingly stiff? Let us know where you stand in the comments section below.
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