Cboe closes acquisition of ErisX
Cboe Global Markets, Inc. has completed the acquisition of Eris Digital Holdings, LLC (ErisX), an operator of a U.S. based digital asset spot market, a regulated futures exchange and a regulated clearinghouse. The deal was first announced in October 2021.
Ownership of ErisX allows Cboe to enter the digital asset spot and derivatives marketplaces through a digital-first platform developed with industry partners to focus on robust regulatory compliance, data and transparency.
Cboe plans to operate the ErisX business as a subsidiary with Thomas Chippas, Chief Executive Officer of ErisX, remaining as head of the digital asset business, reporting to Chris Isaacson, Executive Vice President and Chief Operating Officer of Cboe. In addition to operating the existing spot, derivative and clearing platforms, Cboe also intends to develop and distribute a range of digital asset data products.
Using robust market data based fundamentally on actionable bid and offer prices from the spot crypto market, Cboe Digital plans to develop a benchmark data stream to help market participants evaluate the appropriateness of crypto execution prices.
“I am incredibly proud of the ErisX team for their relentless pursuit of innovation in the digital asset space. From the beginning, our vision was to advance the digital asset spot, data, derivatives and clearing ecosystem by making regulatory compliance and operational integrity the foundation of the ErisX business,” said Thomas Chippas, Chief Executive Officer of ErisX.
“I couldn’t be more excited for the future as we join forces with Cboe and our industry partners to leverage their collective market expertise and global resources to not only grow ErisX, but also to develop global regulatory and compliance standards that have a lasting impact on the entire digital asset space.”
Market participants, including a growing number of institutional firms, have continued to request exposure to digital assets. The ErisX platform was built with the traditional exchange principles of transparency, price discovery and regulatory controls, laying the foundation for institutional trading of digital assets. ErisX’s intermediary-friendly model has brought resiliency and security to the digital asset space with physically delivered futures contracts traded at and cleared through a CFTC regulated Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO).
ErisX futures contracts trade alongside its spot market on an innovative and unified platform, bringing price transparency and collateral efficiency.
Terms of the deal were not disclosed, however the company noted that the purchase price is not material from a financial perspective. ErisX is positioned to be a long-term leader as regulation is expected to play an increasingly prominent role in digital assets, and Cboe plans to make the early investments necessary to help maximize revenue growth potential over the medium and long term.
Cboe anticipates ErisX will reach EBITDA profitability within two to three years, benefiting from a diversified stream of revenue drivers.