Chicago Options Exchange Cboe Acquires ErisX for Undisclosed Amount as It Enters Derivatives Space

Cboe Global Markets Inc (CBOE) announced the acquisition of Eris Digital Holdings LLC (ErisX), on Wednesday. Pursuant to the deal, ErisX, a spot and derivatives exchange for digital assets, which also operates a regulated cleaning house, will also go by “Cboe Digital”. Although neither party disclosed the terms of the deal, it is subject to regulatory approval and expected to conclude in the first half of 2022.

Ownership of ErisX affords Cboe the unique opportunity to venture into the digital asset spot and derivatives marketplace. As Cboe president and chief executive officer Ed Tilly disclosed in an interview:

“This is a great expansion opportunity and fully aligned with where customers are asking us to operate. In one move, we enter the digital asset spot market, derivatives, data, and clearing ecosystem”

ErisX also offers a digital-first platform – with input from industry partners – that focuses on regulatory compliance and data. The Cboe acquisition comes amid Bitcoin price surging to a new record high of $66,644. Furthermore, the price surge was also seemingly boosted by Tuesday’s inaugural launch of the first US futures-based ETF.

Cboe Was Formimg Strategic Alliances with Industry Participants Prior to ErisX Acquisition

Cboe was one of the first investors in ErisX – founded in 2018 and also based in Chicago. En route to acquiring ErisX, the exchange secured the support of a wide range of market players and participants. These include prominent retail brokers, crypto-lending firms, and sell-side banks – namely, NYDIG, Robinhood, Paxos, Galaxy Digital, Fidelity Digital Assets and Webull. These players will form a Digital Advisory Committee tasked with advising Cboe on issues pertaining to the derivatives markets. Furthermore, membership bestowment of the Digital Advisory Committee draws a commitment to ongoing engagement with Cboe Digital markets. In addition, certain listed members are looking to acquire minority ownership interests in Cboe Digital and serve as partners in business growth.

Thomas Chippas, chief executive officer of ErisX, commended the acquisition and forthcoming partnership. Chippas commented that “derivatives are an essential component of a scaled digital marketplace”. He further stated that Cboe’s position as a leading derivatives exchange operator grants it the resources and know-how to thrive. In Chippas’ words, Cboe is not only capable of growing ErisX, but also the entire digital asset space.

Several other ErisX founders also weighed in with their votes of confidence for Cboe. For instance, Don Wilson, founder and CEO of DRW, said the acquisition and creation of Cboe Digital would accelerate ErisX’s vision. The vision is to foster a transparent and well-regulated marketplace for crypto and its derivatives.

Back in December 2017, Cboe launched its own Bitcoin futures, but discontinued in 2019 due to sales underperformance. At the time, the company stated that it would reassess its digital assets derivatives plans.