ErisX

From MarketsWiki
Jump to: navigation, search
ErisX
Erisx.jpg
Founded 2018
Headquarters Chicago, Illinois
Key People Tom Chippas, CEO; Matt Trudeau, Chief Operating Officer
Products Cryptocurrency futures and spot trading markets
Twitter @ErisX_Digital
LinkedIn Profile
Website ErisX Home
Releases Company News
Blog ErisX Blog

ErisX is the successor to Eris Exchange, a designated contract market that listed interest rate swap futures products. ErisX plans on trading and clearing cryptocurrency futures contracts, in addition to the spot trading in cryptocurrencies it already offers (which launched in April 2019). Its investors include DRW Venture Capital, Valor Equity Partners, TD Ameritrade, Virtu Financial, NEX Opportunities, Cboe Global Markets, CTC Group Investments, Digital Currency Group, Nico Trading, Pantera Capital, Third Stone Partners, CMT Digital, Susquehanna International Group, XR Trading, C2 Capital Management and ED&F Man Capital Markets Inc.

ErisX's stated goal was to bring digital currencies closer to traditional asset classes by appealing to brokers, including some used by millions of small retail investors. [1]

History

On October 3, 2018, ErisX announced its formation as the successor to Eris Exchange, a designated contract market that listed interest rate swap futures products. The company said it planned to trade and clear cryptocurrency futures contracts at some point. The exchange also said that it would offer spot trading. According to ErisX, its investors include DRW Venture Capital, Valor Equity Partners, TD Ameritrade, Virtu Financial, NEX Opportunities, Cboe Global Markets, CTC Group Investments, Digital Currency Group, Nico Trading, Pantera Capital, Third Stone Partners, CMT Digital, Susquehanna International Group, XR Trading, C2 Capital Management and ED&F Man Capital Markets Inc.[2]

Following quickly on the closing of its first round of financing, ErisX announced on December 4, 2018, that it had closed a second funding round of $27.5 million with backing from new investors, Bitmain, ConsenSys, Fidelity Investments, Nasdaq Ventures and TradeStation Securities’ parent company, Monex Group Inc. Some investors from the earlier funding round also participated in this funding.[3] According to The Block Crypto, by the time ErisX launched its Ether futures in May 2020, it had received $47.5 million in funding.[4]

On July 18, 2019, ErisX announced that the exchange had become a member of the Chamber of Digital Commerce, a trade association representing the digital asset and blockchain industry.[5]

In April 2020, ErisX announced a partnership with Fidelity Digital Assets designed to facilitate access to ErisX's cryptocurrency spot market for Fidelity's investors.[6]

In August 2020, ErisX announced it was chosen to participate in a pilot program by the State of Hawaii’s Digital Currency Innovation Lab (DCIL) to provide residents of Hawaii with access to a U.S.-based spot market as well as futures markets for cryptocurrencies. ErisX was one of 12 digital currency businesses allowed to do business in Hawaii without obtaining a state money transmitter license under the terms of the two-year program.[7]

Operations

Spot trading

ErisX announced it was launching its spot market trading as well as related settlement services on April 30, 2019, the same day it announced it had closed another $20 million in funding from investors. Its initial cryptocurrencies were bitcoin, Bitcoin Cash, Litecoin, and Ethereum traded against the U.S. dollar and against each other. In an interview with CoinDesk, Chief Strategy Officer Matt Trudeau said that ErisX was continuing to build out its technology, raise funds, and apply for futures and futures clearing licenses.[8] Spot market data is published by TradeBlock on its "Markets" page.[9]

Clearing

The U.S. Commodity Futures Trading Commission (CFTC) licensed ErisX Clearing LLC, a fully owned affiliate, as a derivatives clearing organization (DCO) on July 1, 2019. ErisX provided no launch date for futures trading and clearing. The approval does not permit ErisX Clearing to clear FCM-carried business.[10] In a blog post in October 2019, ErisX CEO Thomas Chippas said that, pending regulatory review, ErisX hopes to launch new digital asset futures products by the end of 2019.[11]

The company announced on November 4, 2020 that it received permission from the CFTC not only to clear swaps but also to clear other commodities in addition to cryptocurrencies.[12]

Futures

ErisX notified its participants on December 16, 2019, that it would begin trading physically delivered bitcoin futures the next day, December 17.[13] The exchange had certified its futures contract design as complying the CFTC's regulations with the agency in October. According to the document filed at that time, ErisX futures call for final delivery of one-tenth of one bitcoin by the seller to the buyer. The exchange further said that it would list daily, weekly and monthly expirations. The contracts call for full pre-funding of the total contract values and for delivery directly into and out of participants' accounts at the clearing house.[14] Volume on the first and second days of trading was one contract each day. At the end of trading on the second day, there was no open interest in the contract.[15]

On May 11, 2020, the exchange announced that it was immediately commencing trading in physically deliverable Ether futures contracts. They are the first Ether derivatives contracts to be listed on a U.S. exchange.[16] The exchange's Ether contracts, one of which is priced in U.S. dollars per Ether and the other of which is priced in bitcoin, call for delivery of one Ether. Contracts are listed for monthly and quarterly settlements.[17] The minimum block size for the Ether contracts is 50 contracts.[18]

According to a blog post on December 1, 2020 ErisX said it had started offering "bounded" cash settled contracts on bitcoin and Ether. The bounds are announced by the clearinghouse at the time the bounded contract is listed. Because losses, as well as gains, are constrained by the bounds, less margin is required for the fully collateralized contracts.[19][20]

The exchange submitted certifications to the CFTC for three new binary option contracts on events arising from American professional football betting action. Participation in the contracts is to be limited to eligible contract participants, a CFTC-defined class of traders, and exchange-approved market makers. The certifications were filed on December 14, 2020.[21] The CFTC informed the exchange on December 23 that it had commenced a 90-day review of the proposed contracts and provided questions regarding the legal status of wagering across the U.S., among other things.[22]


On May 11, 2020 John Lothian, executive chairman and CEO of John Lothian News, spoke with ErisX CEO Thomas Chippas and ConsenSys Founder and CEO Joseph Lubin about the launch of Ether futures. The recording is available here.

Key People

  • Thomas Chippas, CEO
  • Matt Trudeau, COO


References

  1. TD Ameritrade and High-Speed Traders Back New Crypto Exchange. The Wall Street Journal.
  2. ErisX Announces New Exchange for Digital Asset Investors and Traders. ErisX press release via Businesswire.
  3. Fidelity, Bitmain and More Invest $27 Million in Crypto Trading Platform ErisX. Coindesk.
  4. Crypto exchange ErisX announces launch of physically settled ETH futures. The Block Crypto.
  5. ErisX Announces Membership to Chamber of Digital Commerce. Businesswire.
  6. ErisX Advances Strategic Relationship with Fidelity to Expand Access to Digital Assets. BusinessWire.
  7. ErisX Selected to Participate in Hawaii's Digital Currency Innovation Labl Pilot Program. Medium.
  8. ErisX Launches Crypto Spot Market on Heels of New $20 Million Raise. CoinDesk.
  9. ErisX Market Data Now Available on TradeBlock. Business Wire.
  10. TD Ameritrade-Backed ErisX Gets Green Light to Settle Futures in Bitcoin. CoinDesk.
  11. FIS Back-Office Services Integrate ErisX Digital Asset Futures Contracts into Institutional Workflow. ErisX Insights Blog.
  12. ErisX Announces DCO Amendment and Clearing Services. Medium.
  13. Market Notice. ErisX.
  14. CFTC Regulation 40.2(a) Certification. Notification Regarding the Initial Listing of Eris Exchange Physically Delivered Bitcoin Futures (Eris Exchange Submission #2019-01). Commodity Futures Trading Commission.
  15. Futures Volume and Open Interest. ErisX.
  16. ErisX Pioneers First U.S. Based Ether Futures Contract. Business Wire.
  17. Current Futures Products. ErisX.
  18. Amendments to Eris Exchange Rule 601 (Block Trades) and Establishment of Block Trade Size for Ether Futures (Eris Exchange, LLC Submission #2020-05E). ErisX.
  19. Bitcoin Derivatives Firm ErisX Adds Cash-Settled Contracts After Physically Settled Futures Fall Flat. CoinDesk.
  20. ErisX Introduces Cash Contracts to Enable Short Positions in Crypto and Protect Against Market Volatility. Medium.
  21. Trading Organization Products. U.S. Commodity Futures Trading Commission.
  22. CFTC Eris 40.11 Letter. Commodity Futures Trading Commission.