Future of Money

Bourse operator Cboe to buy digital asset exchange ErisX

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Chicago Board Options Exchange (CBOE) Global Markets sign hangs at its headquarters building in Chicago, Illinois, U.S., September 19, 2018. REUTERS/Michael Hirtzer

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NEW YORK, Oct 20 (Reuters) - Cboe Global Markets (CBOE.Z) said on Wednesday it was buying Eris Digital Holdings (ErisX), a spot and derivatives exchange for digital assets, as the exchange operator seeks to become a major player in the cryptocurrency industry.

ErisX, which also runs a regulated clearing house, will be renamed Cboe Digital.

Terms of the deal were not disclosed. It is expected to close in the first half of 2022, subject to regulatory approval.

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"This is a great expansion opportunity and fully aligned with where are customers are asking us to operate," Cboe Chief Executive Officer Ed Tilly said in an interview.

Cboe's acquisition comes as the price of bitcoin BTC=BTSP flirts with its record high of $64,895.22 on the back of the launch of the first U.S. futures-based bitcoin exchange-traded fund on Tuesday. read more

Cboe had launched bitcoin futures in December 2017, but pulled the product in March 2019 amid waning volumes, saying it would reassess its digital asset derivative plans. At the time, the notoriously volatile cryptocurrency was trading around $3,855.

The Chicago-based equities, options, FX and futures exchange operator was one of the first investors in ErisX, which was founded in 2018. ErisX, also based in Chicago, operates a U.S. digital asset spot market, a regulated futures exchange and a regulated clearing house.

"In one move, we enter the digital asset spot market, derivatives, data, and clearing ecosystem," Tilly said.

Cboe also said it also enlisted a group of retail brokers, trading firms, and banks, including DRW, Fidelity Digital Assets, Galaxy Digital, Interactive Brokers (IBKR.O), NYDIG, Paxos, Robinhood (HOOD.O), Virtu Financial (VIRT.O) and Webull, to form a digital advisory committee to help guide the exchange.

Some companies on the committee also intend to acquire minority stakes in Cboe Digital and to serve as partners in the growth of the business, Cboe said.

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Reporting by John McCrank; Editing by Richard Chang

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