CBOE's chief executive has no time for Wall Street's inarticulate bitcoin futures critique.
CBOE’s chief executive has shot down complaints against the launch of its bitcoin futures market, labeling them a “cheap shot”.
CBOE chairman and chief executive Edward Tilly has come out fighting against claims that the exchange’s bitcoin futures listing was a rushed launch, stating that it had been working under the market regulator’s oversight “for months and months at every level” leading up to the launch.
For context, the Futures Industry Association (FIA)– an influential Wall Street lobby group whose members include JPMorgan Chase and Goldman Sachs wrote a letter to the US Commodity Futures Trading Commission (CFTC) last week, claiming that CBOE’s bitcoin futures launch “did not allow for proper public transparency and output”.
CBOE functions under a self-certified regime that allows them to certify their derivatives products themselves, under law. “This process does not distinguish for a product’s risk profile or unique nature,” wrote FIA chief Walter Lukken in his critique. “We believe that this expedited self-certification process for these novel products does not align with the potential risks that underlie their trading and should be reviewed.”
He went on to add that a “public discussion should have been had” surrounding CBOE’s bitcoin futures contract launch.
Speaking to the Financial Times, CBOE chief Edward Tilly pushed back against the complaint, calling it an “uncalled for” and a “cheap shot.”
I think letters like that and cheap shots to our regulator, the CFTC, are uncalled for to make it seem this was an overnight self-certification without the proper amount of CFTC involvement. This is just irresponsible. I respect all the concerns that the industry has but when it’s articulated in the way the FIA did, not so much.
Tilly went on to confirm that the CBOE did address the concerns of Thomas Peterffy, founder and chairman of a brokerage firm Interactive Brokers. Peterffy, a billionaire, wrote in a letter that has also been published on the Wall Street Journal that bitcoin and cryptocurrency-related financial products should be kept away from the ‘real economy.’
“That was raised at OCC [Options Clearing Corporation]. OCC considered that, as they should when Thomas speaks and determined that the current structure of OCC’s clearing fund was the appropriate one,” Tilly revealed. “Again, I default to their expertise and I’m comfortable with their decision.”
Curiously, Tilly did not rule out a scenario in the future wherein CBOE owns and operates its own bitcoin trading platform.
Maybe one day. Right now we stick to what we know.
CBOE’s launch on Sunday stole a march on the upcoming launch of its cross-town Chicago rival CME Group’s own bitcoin futures launch next Monday, December 18.
Featured image from YouTube/Bloomberg.
Last modified: March 4, 2021 5:02 PM