Some of the world's largest derivatives brokers criticized plans to offer bitcoin futures and options on US stock exchanges, telling regulators that contracts have been rushed to the market without proper consideration of the risks.
The Futures Industry Association, whose members include Goldman Sachs Group Inc., JPMorgan Chase & Co. and Citigroup Inc., detailed their concerns in a letter to Commodity Futures Trading. Commission on Wednesday. The association said there should have been more discussion about margin levels, bargaining limits, stress tests and compensation before contracts were greenlighted.
CME Group Inc and Cboe Global Markets Inc. were the first exchanges to approve bitcoin derivatives, which paved the way for major investors participate in a volatile and largely unregulated market that some have called a bubble. Cboe will start trading futures on December 10, while CME contracts will debut on December 18. The exchanges were allowed to offer the products after promising the regulators that they comply with the law, and the contracts will be subject to the supervision of the CFTC. .
"A more thorough and considered process would have allowed a solid public discussion among member firms, exchanges and information exchange centers," the FIA said in its letter, signed by the organization's executive director, Walt Lukken. . "The recent volatility in these markets has underscored the importance of establishing these levels and processes in an appropriate and conservative manner."
Bitcoin has risen more than 1,400 percent this year, in part because of expectations that new derivatives will boost demand. But the cryptocurrency has also undergone some dramatic changes, falling almost 20 percent in less than 90 minutes on November 29. Some of the places where it operates have suffered interruptions and cuts.
"We remain apprehensive about the lack of transparency and regulation of the underlying reference products on which these futures contracts are based and whether the exchanges have adequate supervision to ensure that the reference products are not susceptible to manipulation, fraud and operational risk, "said the FIA.
obliged to offer services for bitcoin products, regardless of the shares of the exchange.