Exchange operators split on crypto derivatives
The speakers argued that legacy exchanges are taking divergent paths on crypto derivatives, with CME litigating against regulators while competitors partner with crypto-native platforms.
The argument
The guest noted that ICE has partnered with OKEx and Eurex has partnered with Kraken, framing CME's lawsuit against the CFTC as a business-driven defensive move. The hosts warned that CME's legal challenge could backfire if regulators use their broad discretion to reclassify traditional rolling futures as swaps.
The thesis, stress-tested
✓ What validates it
- ✓Court ruling in the CME v. CFTC lawsuit
- ✓Launch of joint crypto derivative products by ICE/OKEx or Eurex/Kraken
▸ Risks discussed
- ▸Regulatory retaliation could lead to traditional rolling futures being reclassified as swaps
- ▸CME could lose market share to competitors embracing crypto partnerships
Hear it yourself
"Futures are one to two days, with the lower, what we call confidence interval, so less margin. And I don't wanna get too technical, but it's more than two times if you look at the square root of time and the collateralization, but forget that for now. The problem with this whole idea is that we have some very, very liquid swaps and some very that are and we have some very illiquid futures. And so from a principles based perspective, you should really collateralize something not by what it's called, but by the properties that it has."
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