Just a few days prior to the introduction of CBOE Bitcoin futures products this Sunday 12, Wall Street banks are up in arms against the products citing fears that the market may fail to cope with the cryptocurrency’s volatile price swings.
Futures Industry Association on Thursday wrote an open letter Commodity Futures Trading Commission in the U.S. yesterday to protest the entry of the new products by Chicago exchanges, CME Group and CBOE Global Markets.
Related Coverage: Bitcoin prices rise as CME to launch Bitcoin Futures on DEC 18
The draft said the rules for bitcoin futures trading do “not align with potential risks that underlie their trading”. Also that the introduction or certification did not allow for public transparency and input.
“In light of the CFTC and NFA’s public statements regarding the riskiness of the underlying cryptocurrency products. We believe that the launch of new exchange-traded derivatives in cryptocurrencies deserves a healthy dialogue between regulators, exchanges, clearinghouses. Also, the clearing firms who will be absorbing the risk of these volatile, emerging instruments during a default”.
They said it was concerning that clearing members would bear the risks associated with the listing of the products. Instead of making the exchanges and clearinghouses who have listed these products. Besides, CFTC should have held consultation regarding whether there was a need for establishing a separate guarantee fund for the new product. The group includes world’s largest brokers, including Goldman Sachs, Morgan Stanley, JPMorgan, and Citigroup.
Bitcoin is now selling at $16,117.70 on CoinMarketCap, in a less than 3-day run since topping $12,000.