Chicago-based ErisX has filed a comment letter with the Commodity Futures Trading Commission () in response to the agency’s request for feedback on Ethereum ()’s mechanics and market.
The letter, on Feb. 15, sets forth the exchange’s belief that “the introduction of a regulated futures contract on Ether would have a positive impact on the growth and maturation of the market.”
As , ErisX is a reboot of traditional futures market Eris Exchange, and is expected to begin support for spot trading in ₿itcoin (), Ethereum and Litecoin (), as well as , in the second half of 2019, pending regulatory’ approval.
The letter argues that “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.”
The CFTC has long determined that ₿itcoin is a commodity, given that it aspires to replace sovereign currencies — rather than a security, which would bring it under the Securities and Exchange Commission ()’s charge. After , Ether too was of a securities classification in June 2018.
In its letter, ErisX outlines the conceptual distinction between Ethereum and its predecessor, noting that “Ethereum built upon some of the architectural principles of ₿itcoin 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.”
In its diagnosis of the current state of the Ethereum market, the exchange affirms its view that a lack of regulatory clarity has prevented regulated enterprises from entering the sector, resulting in a preponderance of “unregulated or lightly regulated ‘exchanges’ [and] ‘brokers’ [emerging] to fill the gap, many of them off-shore.” The associated risks — including price volatility and liquidity fluctuations — are therefore:
“Not unique to Ether, but [may be exacerbated by] the current fragmented global market structure of trading platforms and ‘exchanges’ with significantly varying degrees of regulatory oversight and operational transparency and integrity.”
ErisX thus contends that standardized, CFTC-regulated ETH products would draw broader participation from institutional actors and commercial users, resulting in “more robust, liquid, and resilient markets,” better risk management and more efficient, accurate price discovery.
As , ErisX has this month appointed three veterans from Barclays, YouYube and the Chicago Board Options Exchange to fill executive roles, having the appointment of ’ Joseph Lubin to its board of directors in January.
Published at Sat, 16 Feb 2019 15:29:00 +0000
