The United States Commodity Futures Trading Commission (CFTC) has granted Bitnomial, a digital asset derivative exchange, a clearinghouse license. This license adds to Bitnomial’s existing derivatives exchange and brokerage licenses, making it a regulated and vertically integrated market structure.
The CFTC approved Bitnomial’s application after several delays, with a vote of four to one. Vertical integration, which is a controversial practice in unregulated crypto firms, was addressed by CFTC Chair Rostin Behnam in his statement on Bitnomial’s registration. He stated that vertically integrated derivatives clearing organizations (DCOs) are not new structures for the Commission and that Bitnomial follows a traditional intermediated clearing model.
However, Commissioner Christie Goldsmith Romero disagreed with Behnam, considering the Bitnomial registration as a precedent. She expressed concerns about the risks associated with vertically integrated market structures, particularly in digital assets. Romero emphasized the need to analyze these risks and learn from previous considerations of changing traditional market structures.
Bitnomial founder and CEO Luke Hoersten highlighted the significance of obtaining these additional licenses, stating that they have been working towards this goal to expand Bitnomial’s product offering and customer base.
Commissioner Kristin Johnson called for a rulemaking on vertical integration to address conflicts of interest arising from it. She supported Bitnomial’s application and discussed the topic further in a separate statement on DCOs.
The CFTC Divisions of Clearing and Risk, Market Oversight, and Market Participants issued a staff advisory on affiliations between designated contract markets, DCOs, and intermediaries. This advisory reminds them of their compliance obligations, including the segregation of clearing member funds from the DCO’s own funds.
Overall, the granting of the clearinghouse license to Bitnomial by the CFTC signifies a step towards regulation and vertical integration in the digital asset derivative market.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | 🇺🇸 |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | Luke Hoersten, Kristin Johnson, Christie Goldsmith Romero, Sam Bankman-Fried, Rostin Behnam |
| Companies | FTX, CFTC, Binance, Bitnomial, SEC |
| Currencies | None |
| Securities | None |
