Anchorage Digital applies to become a CFTC-registered swap dealer
Why it matters
Funds that trade crypto options could soon face a US-registered counterparty that also holds their coins. It puts crypto derivatives under the rules banks follow for rate and currency swaps.
Post to XThe short version
Anchorage Digital, a US crypto bank, has applied to register a new business with the CFTC, the US watchdog for derivatives, The Block reported on 5 November. If approved, it would sell contracts that let big investors bet on, or protect against, future bitcoin and ether prices for up to one year.
Anchorage Digital has applied to register a swap dealer, a firm licensed to write derivative contracts for clients, with the CFTC, according to a statement it shared with The Block. The application went in through Anchorage Digital Swap Dealer, LLC and is being reviewed by the National Futures Association, the industry body that handles these filings.
If approved, the new arm plans to offer European-style options on bitcoin and ether. These are contracts that can only be used on their end date, with terms of up to one year. More products could follow.
So why bother? Chief executive Nathan McCauley told The Block the move puts its options business under the same federal rules as the dealers its clients already trade with. That means CFTC requirements on capital, risk and margin, the framework the Dodd-Frank Act brought in for banks' interest rate, credit and currency markets.
Public companies holding bitcoin and ether have driven much of the options desk's growth, along with asset managers and funds, The Block reported. McCauley would not share volumes or say when approval might come.
Anchorage Digital Bank became the first federally chartered digital asset bank in 2021.
Where this comes from
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