SBI Group reports investee getting CFTC approval for OTC derivatives trading in US

Published at: Aug. 10, 2022

The United States subsidiary of electronic trading platform developer Clear Markets has reportedly received approval from the Commodity Futures Trading Commission, or CFTC, to offer over-the-counter crypto derivatives products with physical settlement.

In a Tuesday notice, SBI Holdings — a stakeholder of Clear Markets — said the CFTC had approved the U.S. subsidiary operating a Swap Execution Facility, in which it plans to offer derivatives trading for U.S. dollar and Bitcoin (BTC) pairs. The Japan-based financial services company said its market maker planned to expand its trading partners in the United States following pilot transactions on Clear Markets.

SBI Holdings announced it had acquired a 12% stake in Clear Markets in August 2018, which it planned to increase in the future. At the time, the Japanese firm said the investment was aimed at creating a crypto derivatives trading platform catered toward institutional investors.

Under the Commodity Exchange Act and related CFTC regulations, derivatives exchanges — whether dealing with crypto or other assets — must have approval to operate as a Designated Contract Market or a Swap Execution Facility in the United States. According to a Fiscal Year 2023 budget request released in March, the CFTC was considering expanding its authority over financial products using crypto.

Related: What really goes on at a crypto OTC desk?

In May, a federal court ordered three co-founders of BitMEX to pay $30 million in civil monetary penalties for allegedly violating the CFTC’s conditions. Major investment bank Goldman Sachs has also reportedly been looking into breaking into crypto derivatives products through the U.S. subsidiary of cryptocurrency exchange FTX.

Cointelegraph reached out to the CFTC and Clear Markets, but did not receive a response at the time of publication.

Tags
Regulation
United States
Derivatives
Cftc
Otc
Sbi
Related Posts
CFTC commissioner says agency has broad enforcement authority on crypto derivatives
Dawn Stump, one of four commissioners currently serving at the Commodity Futures Trading Commission, or CFTC, has released a statement clarifying the agency's authority with respect to digital assets. In a Monday statement, Stump said the CFTC is empowered with both regulatory and enforcement authority for commodities. She did not specifically say that digital assets were cash-like commodities in the eyes of the regulatory body, but “even if a digital asset is a commodity, it is not regulated by the CFTC.” According to the commissioner, however, the agency is within its power to regulate derivatives on digital assets, “such as …
Regulation / Aug. 23, 2021
Beyond BitMEX: CFTC sets a new record for lawsuits in crypto this year
The Commodity Futures Trading Commission, or CFTC, is having a banner year in crypto enforcement. Per the commission's annual review released on Tuesday, fiscal year 2020 featured seven monetary relief actions against firms engaged in illegal activity in crypto, which is a new record. The review said: "In conjunction with the Division’s Digital Asset Task Force, the Commission brought a record setting seven cases involving digital assets." These included charges against PanForex for offering leveraged trading to U.S. persons without registering in the United States, as well as against Digital Platinum for classic fraud. The CFTC is the U.S. federal …
Regulation / Dec. 1, 2020
The new episode of crypto regulation: The Empire Strikes Back
The latest news has left the decentralized finance community in a collective fetal position. Responding to the threat of increased regulatory oversight, leading decentralized exchange Uniswap recently restricted the trading of certain tokens. Earlier in July, Dan M. Berkovitz, chairman of the Commodity Futures Trading Commission (CFTC), said that DeFi derivatives platforms might contravene the Commodity Exchange Act (CEA): “Not only do I think that unlicensed DeFi markets for derivative instruments are a bad idea, but I also do not see how they are legal under the CEA.” Most worrisome of all is the initial version of the United States …
Technology / Aug. 27, 2021
Leaders of global CBDC projects talk shop in panel today
As part of DC Fintech Week, a digital conference on the governmental side of the financial technology sector, several international leaders gathered for an Oct. 19 panel called: Central Banks, CBDCs and Cryptoeconomics. "I don't see technological barriers in this area, but I do see technological challenges," Cecilia Skingsley, First Deputy Governor of Riksbank, the central bank of Sweden, said on the panel. "The challenge is not so much technology in itself, but it's more about — we have to choose what sort of policy objectives do we want to focus on, what is the problem we want to solve," …
Regulation / Oct. 19, 2020
SEC loses a battle to win the war? Ripple dissociates from pumping XRP
When the United States Securities and Exchange Commission filed legal action against Ripple Labs and its top-two executives in December, alleging that its XRP coin was in fact a security and that the firm had raised over $1.38 billion through an unregistered securities offering in 2013, many wondered if XRP would even survive. Some exchanges delisted XRP; some asset managers sold their XRP tokens. XRP had lost its place as the top 3 currency by market capitalization and was even looking like it could drop from the top 10. But reports of Ripple’s demise were spectacularly exaggerated. As of mid-April, …
Regulation / April 18, 2021