September 12, 2017

CBOE Boards the Cryptocurrency Train

On August 2nd, the Chicago Board Options Exchange (CBOE) launched itself into the Bitcoin market worth tens of billions of dollars via an announcement that left many of the cryptocurrency’s users jumping for joy. This announcement revealed that the CBOE has entered into an exclusive global license with Gemini Trust Company to use Gemini’s Bitcoin market data to create new indices and to redistribute Gemini’s market data over the CBOE’s market data feeds. The CBOE also plans to use Gemini’s data to develop Bitcoin futures, which it expects to list on the CBOE Futures Exchange (CFE) in late 2017 or early 2018.

CFTC and SEC Issues

The implications of this announcement are huge; with the CBOE in the market, cryptocurrency futures will now be traded on a well-known and heavily regulated global exchange. Still, the CBOE will have to jump through some regulatory hoops to put its plan into action. Gemini Trust made headlines back in March when the SEC rejected a request from Better Alternative Trading System (BATS) to make a rule change that would have allowed for a Winklevoss Bitcoin Trust Exchange Traded Fund (ETF) listing on BATS. At that time, the SEC asserted its belief that significant markets for Bitcoin were not up to par as far as regulation goes and that as such, the ETF listing for Gemini Trust would not meet the requirements necessary under the Securities Exchange Act of 1934. To date, the SEC and CFTC have not commented on the CBOE’s August 2nd announcement.

Although Bitcoin fans are cheering this recent decision, it remains to be seen what regulatory hurdles may be thrown at the CBOE and the cryptocurrency market as a whole.

Article by Julianne Dardanes 




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