ErisX: Behind the Headlines
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With Summer 2020 upon us, we wanted to take a moment to reflect on all of the exciting milestones ErisX achieved this year. One of the most recent achievements was on Friday, May 29th, when ErisX’s clearing and settlement arm, Eris Clearing, became the first Derivatives Clearing Organization (DCO) under the jurisdiction of the Commodity Futures Trading Commission (CFTC) to physically deliver a bitcoin futures contract.
In established capital markets, a warehouse facilitates the delivery of the underlying commodity (such as wheat and corn) for a futures contract. Eris Clearing is not a warehouse but directly a CFTC-regulated entity, which makes us the first DCO to process the physical delivery of a bitcoin futures contract while removing the middle-man and simplifying the process.
This was one of many initiatives that came to fruition despite a challenging global environment. We also saw our intermediary-friendly vision realized, introduced unique products to the market and established partnerships with leading firms in the crypto space. Below we go behind our headlines to see what they means for the crypto markets.
Partner Announcements
On April 9, we were thrilled to announce that we were expanding safe and regulated access to crypto markets through familiar investing tools, by collaborating with Fidelity Digital Asset Services, LLC (Fidelity Digital AssetsSM). This provides Fidelity’s institutional investors access to the ErisX spot market, increasing the breadth of accessible liquidity as well as providing a secure and transparent marketplace for price discovery.
On April 15, we followed up our Fidelity announcement with the news that TradeStation Crypto’s retail customers could also access ErisX’s spot market liquidity for bitcoin, Bitcoin Cash, Ether, and Litecoin.
The ErisX model has always included intermediaries as a way for crypto to be a part of an investor’s broader portfolio. The addition of Fidelity Digital Assets and TradeStation Crypto brings a stable of vetted institutional and individual investors that want increased access to crypto liquidity.
Further, our time-tested and proven central limit order book model ensures that the best price on our market is available to everyone that trades on ErisX. We recognize and support the spirit of independence in the crypto community by offering to individual investors the same market structure and technology we provide institutional investors, enabling everyone to navigate these unprecedented markets with confidence.
We also announced on April 23 that Caspian expanded liquidity access by enabling clients to trade on ErisX. Caspian’s global customers, including asset managers, brokers and trading firms, can trade on the ErisX platform. Integrating their order and execution system with our reliable and regulated capital markets workflows is another way in which we are enhancing the crypto trading and investing experience.
New York Virtual Currency License (Bitlicense)
It was with great excitement that ErisX announced on May 6 that Eris Clearing, our clearing and settlement arm, secured a Virtual Currency License (Bitlicense) with the New York Department of Financial Services.
To date, the ErisX entities are licensed to operate in 49 states and jurisdictions, including New York. We are currently working to complete the map and offer our services in Delaware, Hawaii, Nevada, Virginia as well as the United States Virgin Islands.
While the CFTC does not have oversight of the spot market, ErisX applies CFTC core principles from the futures markets, bringing these time-tested standards and methods to cryptocurrency trading in the spot market to protect investors and to preserve market integrity.
Ether Futures
Another big milestone for us was on May 11 when ErisX’s Designated Contract Market (DCM) announced the first U.S. based physically settled Ether futures contract. ErisX has always believed that the Ethereum network and businesses powered by it would benefit from broader market participation, a diversity of time horizons and trading objectives as well as more robust, liquid and resilient markets in Ether; improved risk management for asset owners, market makers and miners/validators of Ether will help spur continued growth for all participants.
The Ethereum network is the leading programmable blockchain delivering real-world value to enterprises, governments, and individuals. As the digital fuel for the network, Ether is structured similarly to commodities traded in traditional capital markets today.
We are proud to leverage existing precedents and standards to meet market demands for a secure, transparent, compliant and sophisticated Ether futures product.
Block Trading
Finally, on May 26 ErisX introduced a REST based API for block trading on all our cryptocurrency spot and regulated-futures products. We are removing the friction and risks associated with OTC based workflows and expanding the universe of potential counterparties for our Members with a competitive priced service. Once onboarded, ErisX Members are able to submit pre-negotiated block trades to Eris Exchange and be confident that they have no counterparty risk due to settlement facilitated through Eris Clearing.
Conclusion
It has been a busy year at ErisX. We are excited to be the first DCO to physically deliver a bitcoin futures contract as well as the first DCM to introduce Ether futures contracts. We’ve announced partnerships with Fidelity Digital Assets and TradeStation Crypto to enhance the trading and investing experience for individual and institutional investors. We have expanded liquidity with connectivity from Caspian. We secured our New York Virtual Currency License and brought to market Block Trading capabilities via a REST based API. Are you wondering what we will do next? If so, please sign up for updates or contact business.development@erisx.com.
