Cboe acquires crypto spot and derivatives exchange ErisX

Cboe acquires crypto spot and derivatives exchange ErisX

Cboe Global Markets announced Wednesday that it has agreed to acquire ErisX, a crypto spot and derivatives exchange.

The news marks the return of Cboe in the crypto space. In December 2017, Cboe was the first U.S. regulated exchange to launch bitcoin futures, but in June 2019, it shut the product down. At the time, Cboe said it was assessing its approach for how it plans to continue the crypto business.

The ErisX acquisition news comes just a day after the first bitcoin futures ETF started trading in the U.S. from ProShares. The ETF saw a historic nearly $1 billion in volume on its first trading day on the New York Stock Exchange (NYSE) Arca.

"Now is the right time to fully embrace and help define this emerging asset class," said Chris Isaacson, executive vice president and chief operating officer of Cboe. "With ErisX, in a single step, Cboe is able to enter the digital asset spot, data, derivatives, and clearing ecosystem."

ErisX was founded in 2018 and operates a U.S.-based crypto spot marketplace, a futures exchange, and a clearinghouse. The futures exchange and the clearinghouse are regulated by the CFTC, and the clearinghouse is registered with FinCEN and licensed in several U.S. states and territories.

Cboe plans to operate the crypto business as Cboe Digital. The company will also form a Digital Advisory Committee with high-profile firms to plan the ongoing development of ErisX. These firms include DRW, Fidelity Digital Assets, Galaxy Digital, Interactive Brokers, NYDIG, Paxos, and Robinhood. Some of these firms also intend to acquire minority ownership interests in Cboe Digital and serve as partners in the growth of the business.

The terms of the acquisition haven't been disclosed, but Cboe said the purchase price "is not material from a financial perspective." It plans to fund the deal with a combination of cash on hand and increased debt.

The deal is expected to close in the first half of 2022, subject to regulatory approvals.

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