Odaily Frontline | Is Ethereum futures contract really coming?

This article comes fromFXStreet & The Block & CoinDesk

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Odaily Translator |

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Heath Tarbert, chairman of the U.S. Commodity Futures Trading Commission (CFTC), participated in a "fireside chat" at DC Fintech Week this week, and he said that sometime in 2020, we may see Ethereum futures: "In the next 6 months to a year, you may see a futures contract on (Ethereum) ... not sure how much volume it will have because that's what the market decides, but my guess is that now we at least Provides a point (eligibility for futures contracts on ether), and I think market participants will take that into consideration.”

Still, it’s unclear who might actually be interested in offering ethereum futures contracts to the U.S. market. At least as far as Tarbert knows, no company has applied to launch such a product, but it will appear soon.

Spokespeople for CBOE and Intercontinental Exchange did not immediately respond to requests for comment. A spokesperson for the Chicago Mercantile Exchange (CME) told CoinDesk in a statement that the firm currently has “no plans to launch additional cryptocurrency futures.”

Earlier this month, newly appointed CFTC chairman Heath Tarbert stated that ETH is a commodity and therefore falls under the CFTC’s jurisdiction. He also expects the CFTC to allow ETH futures to be traded in U.S. markets in the near future. He said, "We are very clear about Bitcoin: Bitcoin is a commodity. So far, we have not said anything about Ethereum. As the chairman of the CFTC, I think Ethereum is a commodity." Tarbert admitted , the status of many tokens is "ambiguous in the market," but he said that ultimately "similar digital assets should be treated similarly."

Tarbert added that “forked” assets like BCH, BTG, and ETC were created by a fork of the original underlying blockchain and should be treated just like the original asset, “assuming the fork doesn’t affect the Howey test factor and doesn’t cause Security definition.” In other words, the CFTC’s classification of each token depends on how that token was created.

This has been widely discussed in the crypto community. Brian Kelly, CEO of encryption investment company BKCM, said he is optimistic about the CFTC's identification of Ethereum and smart contracts as commodities. Kelly said such a classification would pave the way for institutional investors: "The CFTC designation of ethereum as a commodity is big news for the crypto space. It brings regulatory clarity. The CFTC is now saying, 'If You buy bitcoin on these smart contract platforms, and they’re commodities. That opens the door for institutions to come in.” Kelly explained that the conversations he’s had with institutions have also been around bitcoin and crypto as an asset that’s ultimately possibility of prohibition. However, the CFTC’s decision to list ethereum as a commodity has eased such concerns for now.

According to Byrne, if the US SEC has not decided to give special treatment to ethereum, it is unlikely that the CFTC chairman will say that ethereum is a commodity. As for why the SEC chose to turn a blind eye, Byrne said: "Ethereum is different for a reason, not because of what the law says. Maybe it has become too big. If you think it is an investment Contracts, could do too much harm to investors and crypto businesses. The only reason I can speculate that Ethereum is being treated differently is that the program is massive and multiple large VCs are lobbying for a special The way they treat this token is what sets it apart from all the other tokens out there. They succeed because money makes money."

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How to start?

Regarding how the new contract will be launched, Tarbert said: "In the past, most people have not self-certified, if they want to create a brand new exchange and DCO (derivatives clearing organization), they will specifically dock with us. So I think A lot depends on who wants to add ethereum contracts to the trading platform. Is it one of the four existing exchanges that have worked with the CFTC for many years, or is it a brand new platform that wants to do this business exclusively? "

Although Tarbert did not disclose the names of the four major crypto exchanges that specialize in derivatives, it is speculated that they may be Seed CX, ErisX, Tassat (formerly trueDigital) and LedgerX.

Referring to pricing, he added: "What our market has been doing (for 150 years) is ensuring full price transparency."

There may be demand for other futures contracts. In the U.K., Kraken Futures (formerly known as Crypto Facilities) offers users BCH, LTC and XRP futures contracts, all of which have grown in popularity since Kraken acquired the company.

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Cooperate with the SEC

Tarbert said that part of the application certification for Ethereum futures contracts was completed in cooperation with the SEC. He notes that any instrument that is not a security is "most likely" a commodity under current federal law (although there are exceptions: Congress, for example, has made clear that movie tickets are not a commodity).

"What we're seeing is that if (the SEC) does an analysis and concludes that a crypto asset isn't considered a security under the old Howey test, in most cases it's a commodity," Tarbert said. It added that securities can be transformed into commodities and vice versa. Tarbert emphasized that the SEC is the entity that determines what is a security, while the definition of commodities falls under the jurisdiction of the CFTC, which is broader.

Recently, the SEC has cracked down on a series of crackdowns on ICOs of tokens it deems to be securities. Earlier this month, regulators filed emergency lawsuits against Telegram and TON issuers for unregistered sales of their Gram tokens, which the SEC considers securities. The SEC filed “urgent action and obtained temporary restraining orders” against two offshore entities of Telegram’s TON ICO, with a court hearing scheduled for October 24 in New York. Stephanie Avakian, co-director of the SEC's enforcement division, said the urgent action was to prevent Telegram from flooding the U.S. market with a flood of digital tokens that the SEC said were illegally sold; the SEC accused the defendants of failing to provide investors with information about Gram and Telegram Information about business operations, financial condition, risk factors, and management as required by securities laws.