Cboe Announces Acquisition of ErisX, Expanding into the Crypto Space with a Spot, Derivatives, and Clearing Platform

Highlights

• Cboe has preparations in place. Participants from the industry will form a Digital Advisory Committee to work on the development of an industry standard-setting platform.
• Its stake in ErisX provides it with access to digital asset spot and derivatives markets, as well as clearing and settlement, according to the CBOE.
• Assuming all regulatory approvals are obtained, the transaction is expected to close in the first half of 2022.
• The development of a comprehensive digital asset market data providing, the creation of indexes, and the exploration of further derivatives products are all possible.

Global market infrastructure and tradable commodities supplier Cboe Global Markets, Inc. (Cboe: CBOE), has announced its acquisition of Eris Digital Holdings, LLC, a subsidiary of Eris Digital Holdings, LLC (ErisX). A digital asset spot market, a regulated futures exchange, and a regulated clearing house, all based in the United States, are operated by ErisX Inc. This is a once-in-a-lifetime opportunity for Cboe to join the digital asset spot and derivatives markets through a digital-first platform developed in collaboration with industry partners, with an emphasis on regulatory compliance, data transparency, and openness to all market participants.

As a result of its founding in 2018, ErisX has placed regulatory compliance and operational integrity at the centre of its development and design. Its spot and futures markets are supported by high-performance infrastructure and real-time market surveillance, respectively. Its real-time clearing system is meant to reduce settlement risk, while its collateral management system facilitates the movement of collateral between spot and futures accounts without causing delays.

Aiming to address common industry challenges and develop the digital asset market to a global level, ErisX was established in 2014. Though institutional investors expect digital assets to be included in their portfolios in the future1, a lack of globally standard laws and an inadequately effective exchange and clearing infrastructure continue to be key roadblocks to the adoption of digital assets. Because of its position as a global market infrastructure provider, Cboe is well-positioned to provide a digital asset marketplace that is focused on regulatory compliance and transparency in order to assist institutions in embracing the digital asset class and offering digital asset trading to their customers.

Cboe wants to rebrand its digital asset segment as Cboe Digital in order to better serve its customers. It has also received support from a diverse group of market participants, including well-known retail brokers, crypto-leading enterprises, and sell-side banks, who have joined forces to establish the Cboe Digital Advisory Committee, which will advise Cboe on the future development of the Eris spot and derivatives markets. Members of the Digital Advisory Committee include DRW, Fidelity Digital Assets, Galaxy Digital, Interactive Brokers, NYDIG, Paxos, Robinhood, Virtu Financial, and Webull, all of which are committed to continuing their engagement with the Cboe Digital markets in the future. As previously stated, certain members of the Digital Advisory Committee who have shown an interest in purchasing minority ownership interests in Cboe Digital wish to become partners in the company’s future development. By utilising the engagement and collaboration of these market participants, Cboe Digital will continue to operate ErisX as a strong, trustworthy, and transparent digital asset exchange platform going forward.