© Thomson Reuters FILE PHOTO: Chicago Board Options Exchange Global Markets Headquarters in ChicagoJohn McCrank
NEW YORK (Reuters) - Cboe Global Markets announced on Monday that it has received regulatory approval to offer leveraged derivatives on its digital trading platform, including physical bitcoin and ether and cash margin futures.
The US Commodity Futures Trading Commission has approved Cboe Digital as the first regulated clearinghouse and crypto exchange in the United States to offer leveraged derivatives contracts in the second half of this year.
Margin contracts will allow users to trade crypto futures with less collateral and will be executed and cleared by a pool of Futures Trading Commission-approved traders, Chicago-based firm Cboe said. The Cboe Digital clearing house will act as the main partner to mitigate the risk of default.
Cboe Digital currently allows trading and clearing of Bitcoin and Ether futures with full guarantees, meaning users must provide the full amount of futures contracts up front.
Derivatives are a proven and valuable tool for investors to access markets and manage their exposure, said John Palmer, president of Cboe Digital, in a statement.
Cboe Digital also supports spot trading of bitcoin, bitcoin, ether, litecoin and USDC.
On October 20, 2021, Chicago-based Cboe announced plans to acquire crypto exchange and clearing house ErisX. At that time, Bitcoin was worth over $67,000. The deal expired in May 2022, and in July, when the Bitcoin price was between $20,000 and $25,000, the exchange operator booked $460 million on a platform called Cboe Digital.
Cboe announced in November that 13 companies had acquired minority stakes in Cboe Digital, including Robinhood Markets Inc, Interactive Brokers, Virtu Financial, Jane Street, Jump Crypto, DRW and Tastytrade, which is owned by IG Group.
FTX applied to the CFTC for approval to trade cryptocurrency derivatives directly, but the application was withdrawn when the company filed for bankruptcy in November.
(Reporting by John McCrank; additional reporting by Hannah Lang in Washington; editing by David Gregorio)