TD Ameritrade-Backed ErisX Gets Green Light to Settle Futures in Bitcoin

The U.S. Commodity Futures Trading Commission has cleared the way for crypto derivatives provider ErisX to offer futures contracts with a new license approval Monday.

ErisX, which is backed by U.S. brokerage TD Ameritrade, announced that the CFTC granted it a derivatives clearing organization license, acting as a secondary approval on top of an existing designated contract market license that the exchange already held.

While no firm timeline was provided, ErisX's announcement said it would launch its futures contracts - which would be physically-settled, meaning customers receive real bitcoin and not the cash equivalent - "Later this year."

Like ErisX, LedgerX has yet to announce a firm timeline for the launch of its bitcoin futures contracts.

On top of its DCO approval, ErisX received no-action relief from the CFTC for certain aspects of its offering.

Specifically, the CFTC Division of Clearing and Risk granted ErisX relief from aspects of Part 39 of the Code of Federal Regulations Title 17.

According to the letter, ErisX now has relief from regulations that would require it to: conduct stress testing on its financial resources; maintain liquidity to fulfill its obligations during a one-day settlement cycle; require periodic financial reports from all of its clearing members; conduct individual stress testing on large traders; produce daily reports on margin payments and end-of-day positions; and detail its margin methodology.

Because ErisX does not allow for margin positions, the Division of Clearing and Risk has agreed to provide relief against these different sections of Part 39.

ErisX will also certify its futures contract market participant rules prior to launch.

In a statement, ErisX head of marketing Jessica Darmoni told CoinDesk that "Prior to onboarding FCMs, ErisX must first certify to the CFTC that its FCM rules comply with the CEA and commission rules and provide market participants and CFTC an opportunity to review the rules."