Cboe Global Markets, a provider of global market infrastructure and tradable products, announced it has entered into a definitive agreement to acquire ErisX, the operator of a U.S.-based digital asset spot market, a regulated futures exchange, and a regulated clearinghouse.
Ownership of ErisX presents a unique opportunity for Cboe to enter the digital asset spot and derivatives marketplaces through a digital-first platform developed with industry partners to focus on robust regulatory compliance, data, and transparency.
Founded in 2018, ErisX was designed and built with regulatory compliance and operational integrity at the fore. Its spot and futures exchanges utilize the high-performance infrastructure and real-time market surveillance. Its real-time clearing system is designed to address settlement risk while collateral management helps to allow seamless movement of collateral between spot and futures accounts.
As a global market infrastructure provider, Cboe is uniquely positioned to offer a digital asset marketplace focused on regulatory compliance and transparency to help institutions embrace the digital asset class and offer digital asset trading to their clients.
Cboe plans to operate the digital asset business as Cboe Digital. The company also has secured the support of a broad range of market participants, including well-established retail brokers, crypto-leading firms, and sell-side banks, who are expected to form a Digital Advisory Committee tasked with advising Cboe on the ongoing development of the Eris spot and derivatives markets.
As members of the Digital Advisory Committee, DRW, Fidelity Digital Assets, Galaxy Digital, Interactive Brokers, NYDIG, Paxos, Robinhood, Virtu Financial and Webull are committed to ongoing engagement with Cboe Digital markets. Certain members of the Digital Advisory Committee listed above also intend to acquire minority ownership interests in Cboe Digital and to serve as partners in the growth of the business. Cboe Digital will leverage the engagement and collaboration with these market participants to continue to operate ErisX as a resilient, trusted, and transparent digital asset venue.
Thomas Chippas, CEO of ErisX, said: “Derivatives are an essential component of a scaled digital marketplace, and Cboe, as one of the world’s largest derivatives exchange operators, has the global customer network, international operations, and innovative vision to not only grow ErisX but the entire digital asset space. With Cboe’s support and network of industry partners, ErisX will enable new and established firms to compliantly and confidently offer cryptocurrency spot and derivative products to their clients, making our transparent and trusted digital asset market the destination of choice for any market participant offering crypto spot or derivative trading services now and in the future.”
Cboe plans to use its real-time, risk and derived data expertise and global network to provide a transparent view into digital asset markets and trade execution. Leveraging digital asset data from ErisX and Cboe’s existing index calculation capabilities, Cboe Digital intends to develop and distribute digital asset indices for potential use in ETP creation and other derivative product opportunities.
Ed Tilly, Chairman, President & CEO of Cboe Global Markets, said: “We believe our acquisition of ErisX, coupled with broad industry participation and support, will help us bring the regulatory framework, transparency, infrastructure, and data solutions of traditional markets to the digital asset space. ErisX has shown an unwavering commitment to improving spot and derivatives crypto trading, and I am confident that together we can not only meet the growing demand for institutional and retail trading solutions but also push the boundaries of digital asset innovation and unlock its next phase of growth.”
Cboe also plans to leverage the Digital Advisory Committee to provide input and guidance on the development of a market data offering based on actionable bid and offer prices from the ErisX spot crypto market. This market data offering is expected to be modeled after established best execution practices in other asset classes, ultimately intending to develop a benchmark to help Cboe Digital’s industry partners and other market participants evaluate the appropriateness of crypto execution prices.