Commissioners wonder if the CFTC is ready for vertical integration, and if digital assets pose extra risks.
The United States Commodity Futures Trading Commission (CFTC) granted digital asset derivative exchange Bitnomial a clearinghouse license on Dec. 13. Bitnomial already had derivatives exchange and brokerage (futures commission merchant — FCM) licenses. Bitnomial thus became a regulated vertically integrated market structure.
The CFTC was acting on an application filed by Bitnomial in April 2022, which was approved by a vote of four to one after several delays. Vertical integration is a controversial practice in unregulated crypto firms. CFTC chair Rostin Behnam addressed concerns about vertical integration on Dec. 18 in his statement on Bitnomial’s registration:
“Currently, the Commission does not have a requirement for addressing affiliate conflicts in its regulations,” he continued.
