Crypto Exchange Makes Case for Ethereum Futures

A comment letter was submitted to the U.S. Commodity Futures Trading Commission (CFTC) by the Chicago-based exchange ErisX.

The letter was filed on Feb. 15 in response to the CFTC’s request for input on the crypto-assets mechanics and markets, and highlights 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 its market.

The argument made by the exchange is that, listing and trading Ether futures on CFTC regulated markets is consistent with their goal of fostering “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 CEA.”

Bitcoin was declared a commodity back in 2015, and after considerable debate, Ethereum too was cleared of its securities speculation status in June 2018. In their letter, the exchange summarizes the distinction between Bitcoin and Ethereum, saying that “where Bitcoin is designed as a means of recording and transferring value in the form of digital ledger entries, Ethereum is akin to a cloud-based computer that can execute programs that are limited only by the imagination of developers.”

In their diagnosis of the Ethereum market, ErisX believes that the lack of regulatory clarity has hampered the participation of enterprises, especially regulated ones, and consequently lead to the emergence of lightly-regulated, or even unregulated “brokers” and “exchanges”, many of which offshore.

The exchange further outlines that the introduction of standardized, CFTC-regulated ETH products will lead to a broader participation from institutional actors, as well as a more robust, liquid, and resilient market, with improved risk management for asset owners.