News

Eris Exchange creates cryptocurrency market

Chicago-based derivatives market Eris Exchange LLC is opening a cryptocurrency market backed by DRW Holdings Inc., Virtu Financial Inc. and TD Ameritrade Holding Corp.

According to spokeswoman Jessica Darmoni, the ErisX platform will let investors trade Bitcoin, Ethereum, Bitcoin Cash and Litecoin, as well as futures contracts on cryptocurrencies. The futures will be physically delivered, that means when the contracts expire, owners will be given the underlying cryptocurrency, not cash.

DRW and Virtu already owned stakes in Eris, while retail brokerage TD Ameritrade is investing as part of the crypto initiative. DRW, whose Cumberland division is one of the world’s biggest crypto traders, and Virtu have agreed to be market makers on ErisX, which could help ensure a deep order book.

Additional backers of the new venture include Valor Equity Partners, NEX Opportunities and Cboe Global Markets Inc. Susquehanna International Group and ED&F Man Capital Markets Inc. also participated in the investment round, ErisX said.

Bakkt, a startup recently announced by New York Stock Exchange owner Intercontinental Exchange Inc., also plans physically delivered futures.

ErisX is seeking to self-certify the new contracts with the U.S. Commodity Futures Trading Commission. The derivatives will be cleared by an Eris-owned clearinghouse that is also under review and must be approved by the CFTC, Darmoni said. Assuming the approvals are granted, the cash trading would begin in the second quarter of 2019 and the derivatives in the second half of next year.