ErisX Makes Case for Ethereum Futures to the United States CFTC

ErisX, a cryptocurrency exchange in the United States has written to the Commodity Futures Trading Commission (CFTC) about the introduction of a regulated futures contract based on ethereum’s native token, the Ether (ETH).

The exchange wrote:

“ErisX believes that the introduction of a regulated futures contract on Ether (“ETH”) would have a positive impact on the growth and maturation of the market for Ether, as well as the Ethereum Network (“Ethereum”) more broadly”

Chicago-based ErisX submitted the comment letter on Friday, Feb. 15, in response to the commission’s request for comments on Ethereum (ETH)’s mechanics and market.

Leading the Charge for Ether Futures

With backing from some Wall Street firms, ErisX, a newly launched cryptocurrency exchange is hoping to launch the first regulated US-based futures market for Ethereum and other cryptocurrencies like Litecoin. As Smartereum reported last October, ErisX CEO, Thomas Chippas, announced that the exchange planned to introduce spot trading in the first half of 2019 while the physically settled futures will follow later in the year pending regulatory approval.

Its letter which is part of the process for regulatory approval stated that it was ErisX is well positioned to provide responses the CFTC’s various questions, in particular, those related to Markets, Oversight, and Regulation.

ETH Futures will increase participation in Ethereum

It explained that ethereum, since its creation in 2015 has increased in use case and participation from tech-savvy individuals to enterprises and other organizations. It explained that CFTC-approved products will further broaden this participation to institutional actors, including investors, speculators, intermediaries, hedgers, miners/validators, and commercial users.

Furthermore it said “listing and trading Ether futures compliantly on CFTC regulated markets is consistent” with the CFTC’s efforts to foster “open, transparent, competitive, and financially sound derivative trading markets [and] to prohibit fraud, manipulation, and abusive practices in connection with derivatives and other products subject to the [Commodity Exchange Act] CEA.”

Ether is similar to Bitcoin

In 2017, the CFTC approved the first cryptocurrency-based futures contract, which is the Bitcoin Futures. Following its announcement and the subsequent issue of Bitcoin Futures on CME and CBOE, the price of bitcoin rallied to an all-time high. While ETH futures is available in some countries, some section of crypto enthusiasts believes that an ETH future in the US will greatly drive ETH price upwards.

ErisX noted that the path is paved for this to happen as Ether, just like bitcoin has been judged to be a Commodity and not a Security. It elaborated on the similarities of both cryptocurrencies:

“Ethereum built upon some of the architectural principles of Bitcoin to extend [its] functionality of [a] distributed, (crypto-economically) secured, (blockchain-based) record-keeping system to include new computational capabilities for the execution of arbitrary code.”

With financial backing from the likes of CBOE, TD Ameritrade, Virtu Financial, and Digital Currency Group, ErisX has holstered its personnel this year. In January, it appointed ConsenSys founder and co-creator of Ethereum Joseph Lubin to its board of directors. Earlier this month it added three executives from Barclays, YouTube, and CBOE.

Solomon Sunny is the market reporter for Smartereum, one of the global leaders in Ethereum, blockchain and currency news. He produces technical price updates on digital currencies and writes recent developments about blockchain.


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