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Crypto startup ErisX debuted to the public earlier this year. Launched by Chicago-based Eris Exchange, ErisX aims to provide a crypto on-ramp to retail and institutional investors – similar to what Bakkt is developing.
The crypto community is buzzing about ErisX. More competition is always a good thing for consumers. Now, it appears Bakkt will have some competition as it rolls out a crypto custody platform and other crypto services.
Right now, there’s limited information about ErisX available online. Today, we’re highlighting some of the things we know about ErisX as it prepares to roll out its product.
ErisX aims to offer a fully-regulated marketplace for digital assets. That marketplace will include both spot and futures contracts.
As the official ErisX.com website explains,
“the ErisX solution provides trading, deposits and withdrawals on a stable capital markets technology infrastructure.”
“With a regulated, liquid and accessible offering, ErisX will enhance the digital asset space for institutional and retail traders alike.”
ErisX is in development by a Chicago-based trading platform called Eris Exchange. The Eris Exchange team has been operating a regulated Designated Contract Market (DCM) for the past seven years.
The company was founded in July 10 to offer cash-settled swap futures. In 2017, ErisX filed for a Derivatives Clearing Organization (DCO) license from the CFTC.
Since Q3 2017, Eris has exclusively focused on digital assets. The board has agreed to focus completely on digital assets moving forward.
The ErisX website explains that the company is expecting to receive DCO approval from the CFTC in Q1 2019. By Q2 2019, ErisX will launch crypto spot contracts. Before the end of 2019, the company will launch futures contracts.
After that, the next step will be to expand digital asset products with options trading.
There are plenty of different crypto marketplaces available online today. ErisX aims to differentiate itself from the competition with the following features:
ErisX will have “rigorous on-boarding” procedures, including AML/KYC certification and “market surveillance provided by experienced third party specialists to protect our markets and the participants from abusive practices,” according to the official website.
ErisX has applied for a DCO license from the CFTC, and they expect that license to be granted in 2019. This will allow the company to offer regulated settlement services for the crypto spot market.
ErisX aims to,“apply regulatory best practices from our futures market to improve the digital assets trading experience.” The goal is to create a healthy, sustainably, and voluntarily compliant spot market.
ErisX also plans to seek individual state regulatory approvals, which will allow customers in 50+ states and US territories to send fiat currency directly to the exchange and trade digital assets on the spot market. Today, even the largest exchanges ban customers in certain states – say, New York – from trading because of complex regulatory frameworks in certain states.
ErisX is backed by some big names, including DRW Venture Capital, Valor Equity Partners, TD Ameritrade, Virtu Financial, Cboe, Chicago Trading Company (CTC), Nex Opportunities, and Digital Currency Group, among others.
ErisX aims to provide effective crypto on-boarding solutions, making it easier for retail and institutional investors to participate in crypto markets. The platform aims to launch trading activity in mid-2019 after receiving a DCO license from the CFTC in early 2019.
To learn more about ErisX and its ongoing development, visit online today at ErisX.com.
Institutional investors have been increasingly showing interest in the crypto world, we have another example of this trend. Retail brokerage TD Ameritrade Holding Corp said it has invested in a new cryptocurrency exchange called ErisX in a bid to offer clients digital asset investment options beyond bitcoin.
TD Ameritrade Holding Corporation provides securities brokerage and related technology-based financial services to retail investors, traders, and independent registered investment advisors (RIAs) in the United States. ErisX will allow clients to potentially trade other cryptocurrency futures, such as Ethereum (ETH) and Litecoin (LTC).
Steve Quirk, executive vice president of Trading & Education at TD Ameritrade stated:
“Our retail clients are seeking to access and trade digital currency products in the same way they do with traditional capital markets – through a legitimate, regulated and transparent exchange.”
“That’s precisely why we chose to invest in ErisX – to make digital currency products more accessible to retail clients.”
Additional backers of the new venture include Valor Equity Partners, NEX Opportunities and Cboe Global Markets Inc., ErisX said in a statement. Susquehanna International Group and ED&F Man Capital Markets Inc. also participated in the investment round, ErisX said.
Crypto so far has struggled to attract mainstream investors and button-down financial firms. Big, established exchanges have already tried to bring bitcoin to Wall Street with mixed results. Crypto markets are volatile, and some regulators worry they are vulnerable to manipulation.
However, things seem to be changing for the better.
Cboe Global Markets and CME Group launched their own bitcoin futures markets in December 2017. Cboe also has a futures product for ether ready but is waiting for regulatory clearance before it goes live with it. Bakkt, the cryptocurrency platform announced in August by Intercontinental Exchange, the parent company of the New York Stock Exchange, has similarly announced its intention to offer a trading platform for physically delivered futures for bitcoin. Elsewhere, Seed CX is aiming to launch a platform aimed at institutions for bitcoin and crypto derivatives trading.
This new venture might serve as a competition for Bakkt.
ErisX has entered into the digital asset space with a broad offering of both spot and futures contracts on one platform for Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH) and Litecoin (LTC). ErisX has integrated digital asset products and technology into reliable, compliant and robust capital markets workflows. With a regulated, liquid and accessible offering, ErisX enhances the digital asset space for institutional and individual traders alike.
TD Ameritrade is a brokerage firm based in Omaha, Nebraska with a major trading center in St Louis, Missouri. The letters TD are derived from Toronto-Dominion Bank, the largest shareholder. The company provides services for individuals and institutions that are investing online. The company offers an electronic trading platform for the purchase and sale of financial securities including common stocks, preferred stocks, futures contracts, exchange-traded funds, options, mutual funds, and fixed income investments. It also provides margin lending, and cash management services.
ErisX is a cryptocurrency trading platform that is still working to get their progress going. However, with a recent Series B funding round that closed today at $27.5 million, it is safe to say that they are prepared to push their momentum to a new level. Contributors to this investment include Bitmain, ConsenSys, Fidelity Investments, Nasdaq Ventures, and Monex Group. These businesses are significant for their current roles in the financial industry, considering that the NASDAQ is the second-largest exchange in the world, and Fidelity handles $7.2 trillion in their clients’ assets. So far, none of the contributors have released the amount of their contribution.
The funding round is the first time these companies have collectively invested in ErisX, which is a project of derivatives market provider Eris Exchange. The platform will make it possible to trade with many cryptocurrencies, with access to bitcoin futures as well. The funding round also included CTC Group Investments, Digital Currency Group, DRW Venture Capital, Pantera Capital and Valor Equity Partners.
In the past, Eris Exchange has also received support from TD Ameritrade, but their goal now is to be the home of a Commodity Futures Trading Commission-regulated futures market and clearinghouse. As of now, the company has not finalized their registration for the clearinghouse. Even though the CFTC doesn’t have any authority in the crypto spot market, ErisX will act as such for crypto. The spot market will allow for trading with Bitcoin, Ethereum, and Litecoin as well.
Thomas Chippas, CEO of Eris Exchange, commented that the funding will help the crypto platform to build itself up and grow the team that is responsible for ErisX. He continued,
“With increasing financial support from leading edge firms, ErisX stands to provide the most robust, secure and regulated digital asset offering available to both institutional and individual participants.”
The launch of spot contracts is scheduled for the second quarter of 2019, and futures contracts are planned to follow them in the other half of the year.
CEO of ConsenSys, Joseph Lubin, commented that,
“The creation and launch of these new platforms is an important step in continuing the convergence of digital and traditional asset classes in global institutional financial services.” Lubin added, “We are excited to invest and to be working with the extremely credible team. We look forward to seeing ErisX drive significant growth in institutional flows in both spot and futures digital asset markets in 2019.”
Jihan Wu from Bitmain weighed in on the new developments as well, saying,
“Many of our customers have been seeking various hedging solutions and would be happy to see US regulatory compliant exchanges like ErisX provide spot and futures’ contracts in one platform. We are confident that our customers will find this strategic partnership beneficial.”
As ErisX launches, they will be up against the performance of Nasdaq, Bakkt, and Fidelity in the institutional investor industry, even though they had contributed to their efforts. With the launch of four tokens on their side, the exchange has a better chance of holding their own and, ultimately, coming out on top.
A new cryptocurrency platform called ErisX burst onto the scene today. ErisX aims to compete with Bakkt by offering regulated crypto custody solutions to retail and institutional investors.
The platform is being developed by ErisX Exchange, a Chicago-based derivatives market. ErisX is backed by TD Ameritrade, Digital Currency Group, Cboe, and other big names.
ErisX is expected to compete with Bakkt, the crypto startup announced earlier this year, by providing an on-ramp to retail and institutional investors interested in crypto.
The ErisX news was first broke by Frank Chaparro of The Block on Twitter (@FintechFrank), who tweeted the following:
“BREAKING! Big institutional crypto news. TDAmeritrade, Virtu, DRW, SIG, Cboe, Digital Currency Group, Pantera Capital, and more are getting behind a brand new market for crypto called ErisX. Aiming to get approval for futures on bitcoin, bitcoin cash, ethereum and lite coin.”
The story was quickly picked up across the rest of the crypto community, with many seeing ErisX as a competitor to Bakkt.
Bakkt is a crypto startup launched in summer 2018. The startup aims to provide regulated custody services to retail and institutional investors, creating an on-ramp that allows all types of investors to securely participate in the crypto space. Bakkt is supported by ICE, the parent company of the New York Stock Exchange, along with a “who’s who” of American corporations – including Starbucks and Microsoft.
Bakkt was already a huge story in the crypto community. Now, ErisX aims to capitalize on a similar niche with its own crypto on-ramp. More competition in the space is nothing but good news for consumers and the crypto industry.
ErisX is creating a platform that will allow users to trade bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH), and Litecoin (LTC). The platform will also offer futures contracts on cryptocurrencies.
Futures contracts traded on the ErisX platform will be physically delivered, which means that when contracts expire, owners will be given the underlying cryptocurrency – not just cash. This is an important difference for some financial institutions, particularly those who don’t trust the unregulated crypto markets.
As a regulated custody service, ErisX will make it easier for hedge funds and similar institutional investors to securely buy and sell cryptoassets. Today, there are limited regulated crypto custody solutions available to institutional investors interested in the space.
Another important distinction with ErisX will be to self-certify new contracts with the US Commodity Futures Trading Commission (CFTC). The derivatives will be cleared by an Eris Exchange-owned clearinghouse that is also under review. That clearinghouse will need to be approved by the CFTC.
“ErisX will eliminate many of the impediments to institutional adoption and usher in a new wave of market participants,” said Don Wilson, founder and CEO of DRW in a press release announcing the deal. “This further develops the digital asset space and brings more transparency to these evolving markets.”
DRW and Virtu already owned stakes in Eris Exchange prior to the announcement of the ErisX crypto trading platform.
Meanwhile, retail brokerage TD Ameritrade has announced plans to invest in ErisX as part of its crypto initiative. DRW, whose Cumberland division is one of the world’s largest crypto traders, and Virtu have agreed to be market makers on ErisX, which should help ensure a deep order book for the market.
President and CEO of TD Ameritrade Tim Hockey weighed in on the partnership with ErisX, stating,
“As investors in ErisX, as well as a strategic contributor in the initiative, we are looking forward to advancing our innovation goals by working with an established, CFTC-regulated exchange that will include digital asset futures and spot contracts on a single platform. Working with these innovative companies gives us the opportunity to help them develop cryptocurrency products that we believe will fill a gap for retail investors within the digital currency ecosystem.”
These financial giants and others have seen competitors like ICE supporting Bakkt. Now, they want to get a slice of the crypto action by supporting their own on-ramp.
Assuming CFTC approval is granted to the Eris-owned clearinghouse, cash trading is expected to begin in Q2 2019.
Derivatives trading, meanwhile, would begin in the second half of 2019.
Stay tuned for more information about ErisX as development continues over the coming months. Bakkt was already huge news for the industry. Now, Bakkt has some competition – and that’s great news for the crypto space and cryptocurrency users.
Ian Grieves, the managing director of ErisX, has recently talked with Finance Magnets and revealed the plans that the company has for 2019 and explained that main differences that the company has from Bakkt, the crypto exchange that is being created by the Intercontinental Exchange (ICE).
Grieves also works as the head of product in the company and he has affirmed that the market is slowly transforming from a speculative wild west market populated by retail investors to a largely regulated trading place that caters for institutional investors. Now, as more institutional investors are entering this market, it is expanding to become something more.
The director started his career as an Options Market Maker and Index Arbitrage at the LIFFE Exchange. He then worked in many other positions until he got the position of Managing Director of the Americas for Object Trading. Now, he works at ErisX and he believes that the market practices of the company mirror the best ones of the derivatives space.
According to him, ErisX will be one of the companies that will lead the way in the development of a more stable, transparent and scalable economy for retail traders. He also tells that they will be first exchange to provide spot and futures contracts at the same platform in 2019 and that they want to create a space with better liquidity and a healthier price discovery environment for the investors so they can build a diversified portfolio.
The idea is to be able to create a marketplace that will be robust, secure and regulated and that will be perfectly adjusted to serve both individual and institutional participants.
During 2019, the company will launch several new projects like futures markets for Bitcoin, Bitcoin Cash, Ethereum and Litecoin. However, they are subject to regulatory approval before they can actually become a reality.
The company is working with TD Ameritrade and other companies to provide their clients with more comfort when they are trading, too.
According to Grieves, the exchange plans on approaching the crypto market in a very multi-faceted way. Their approach, they affirm, is not only about providing a regulated and robust marketplace for the clients but much more than that. The company also wants to expand the universe of participants and to be the “missing link” between the crypto space and investors.
Basically, they want to be a broker. While many crypto companies boast about how decentralization is good, the truth is that many investors are simply more interested in having people solving stuff for them that actually have all the responsibility that decentralization brings to them. This, he believes, will differentiate the company from Bakkt and other similar platforms.
The managing director of TD Ameritrade, J. B. Mackenzie, has affirmed this year that the company will open up additional crypto products on future and spot trading and that the clients could potentially benefit from the trade. ErisX will collaborate with the company to offer these trading instruments for its clients.
According to it, it will also look at the launch of the products launched by other companies to be always understanding the market and following all the trends, as well as using standard regulatory review process.
Another important point is that the company will provide physically delivered futures contracts instead of only digital ones. The company affirms that this can be a solution for more granular contracts sizes and expires and that they will provide a better service for the clients.
It is no secret that most of the companies are looking at the institutional investors. They represent the big money and having a handful of them can be more profitable than having a lot of retail investors instead.
ErisX seems like it will follow the trend and the company is already talking to the regulators in the United States to launch products that will be aimed at this market, however, without forgetting their retail base.
At the moment, the company is expecting to start onboarding spot clients for a Q2 launch and to work together with the investors to incorporate new products and use better technology.