Today Cboe announced that it acquired cryptocurrency startup ErisX, which will become part of a new division CBOE Digital. Chicago-based ErisX built a digital asset spot market, a CFTC regulated futures exchange and a CFTC regulated clearing house.
“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,” said Ed Tilly, Chairman, President and CEO of Cboe Global Markets.
This isn’t Cboe’s first foray into the crypto sector. At the height of the 2017 boom, it launched Bitcoin futures. But after the market crashed, it dropped them in March 2019. Meanwhile, CME’s futures had attracted a bigger audience, and Cboe’s withdrawal made it more viable. And then there’s this week’s launch of the first Bitcoin ETF from Proshares, based on CME futures.
Cboe is planning a Digital Advisory Committee with members drawn from retail brokers, the institutional cryptocurrency space and sell-side banks. Some of the members will also take an equity interest in Cboe Digital. Initial committee members include DRW, Fidelity Digital Assets, Galaxy Digital, Interactive Brokers, NYDIG, Paxos, Robinhood, Virtu Financial and Webull.
While Goldman Sachs is not mentioned as a committee member, Matthew McDermott, Global Head of Digital Assets at Goldman Sachs commented, “This is an exciting development for institutional adoption of cryptocurrencies, and we look forward to finding ways to work closely with the newly created group, Cboe Digital.”
“With ErisX, in a single step, Cboe is able to enter the digital asset spot, data, derivatives, and clearing ecosystem. Now is the right time to fully embrace and help define this emerging asset class,” said Chris Isaacson, EVP and COO of Cboe.
ErisX had raised a total of $47.5 million, according to Crunchbase, with its Series B funding round in early 2019.
Cboe said it would fund the transaction with cash and increased debt. Subject to regulatory approvals, the deal is expected to close in the first half of 2022.