Cboe Completes ErisX Buy; Enters Digital Assets Market
Posted by Colin Lambert. Last updated: May 3, 2022
Several years after failing with an attempt to launch Bitcoin futures, Cboe is making a comeback to the digital assets space with the completing of the acquisition of digital assets exchange Eris Digital Holdings (ErisX). Terms of the deal were not disclosed, however Cboe says the purchase price is “not material” from a financial perspective.
Cboe was the first exchange to list Bitcoin futures in late 2017, however CME Group’s contracts, which were launched a short time after, proved more popular and Cboe de-listed the contracts in 2019. Now, it says ownership of ErisX allows it to enter the digital asset spot and derivatives marketplaces through a digital-first platform developed with industry partners to focus on regulatory compliance, data and transparency.
“Adding ErisX to the Cboe network is another exciting chapter in Cboe’s growth story,” says Ed Tilly, chairman, president and CEO of Cboe Global Markets. “We see enormous potential in the digital asset market and are excited to apply our blueprint of success to this burgeoning asset class. Tom Chippas and the entire ErisX team have made significant progress bringing the regulatory framework and transparency of traditional markets to the digital asset space, and I look forward to working together, with our industry partners, to grow the digital asset market on a global scale.”
Cboe plans to operate the ErisX business as a subsidiary with Thomas Chippas, CEO of ErisX, remaining as head of the digital asset business, reporting to Chris Isaacson, EVP and chief operating officer of Cboe. In addition to operating the existing spot, derivative and clearing platforms, Cboe says it also intends to develop and distribute a range of digital asset data products. Using market data based fundamentally on actionable bid and offer prices from the spot crypto market, Cboe Digital plans to develop a benchmark data stream to help market participants evaluate the appropriateness of crypto execution prices, the group adds.
“From the beginning, our vision was to advance the digital asset spot, data, derivatives and clearing ecosystem by making regulatory compliance and operational integrity the foundation of the ErisX business,” says Chippas. “I couldn’t be more excited for the future as we join forces with Cboe and our industry partners to leverage their collective market expertise and global resources to not only grow ErisX, but also to develop global regulatory and compliance standards that have a lasting impact on the entire digital asset space.”
Cboe says ErisX aims to be a digital asset market rooted in the exchange principles of transparency and regulatory compliance, supported by a network of intermediaries, providing client-driven solutions that help institutions fully embrace this emerging asset class.
It adds that digital assets are globally recognised and are expected to continue to benefit from a regulated derivatives market and central clearing to help mitigate counterparty risk – providing more efficient price formation, additional hedging tools, enhanced transparency, and deeper liquidity. Cboe says it believes meeting the demand for trading digital assets with the advantages of exchange trading is beneficial for all investors, and intermediaries have a key role to play in the ongoing development of Cboe Digital spot and derivatives markets.
“Increased retail participation has fuelled record trading across equities, derivatives and digital assets, demonstrating how investors of all types want access to sustainable financial solutions,” says Isaacson. “Cboe is uniquely positioned to help the growing segment of retail investors access traditional and new financial markets through product innovation, education and collaboration with our industry partners and intermediaries—and now we can leverage the regulatory framework, transparency, infrastructure and data solutions of those trusted markets to further mature and expand digital asset trading and clearing for a broader user base.”