Institutional crypto platform Anchorage Digital has applied to the U.S. Commodity Futures Trading Commission (CFTC) for swap dealer registration, a move seen as a bid to significantly expand its crypto options business targeting institutional clients.
Anchorage Digital submitted its registration application to the National Futures Association (NFA) through its subsidiary Anchorage Digital Swap Dealer, LLC, and is awaiting a decision. The company said its options business has surpassed the $8 billion threshold set by the CFTC for swap dealer registration among U.S. clients. It did not disclose the timing of registration or detailed trading volumes.
Nathan McCauley, co-founder and CEO of Anchorage Digital, said institutional demand for access to digital asset derivatives in a regulated environment continues to grow, and that establishing a dedicated swap dealer entity is part of building the infrastructure to meet that demand.
Swap dealer registration is the CFTC regulatory framework applied to firms that make markets in the swaps market, covering capital, risk management, margin, trade confirmation and reporting, and counterparty treatment. It is the same framework the Dodd-Frank Act applied to banks and dealers in the interest rate, credit and foreign exchange markets. Anchorage said institutional clients have wanted "a regulated U.S. counterparty, documentation their legal counsel is already familiar with, and a counterparty whose risk they can assess just like any other dealer."
Once registration is approved, Anchorage Digital Swap Dealer plans to offer European-style options products with Bitcoin (BTC) and Ethereum (ETH) as underlying assets. Maturities will run up to one year, with additional products to be launched later subject to its own approval process and regulatory requirements.
The company said much of the growth has come from listed companies holding Bitcoin and Ethereum on their balance sheets, as well as asset managers and funds seeking to manage that exposure. Anchorage framed the application as the next step toward becoming a "top-tier full-service institutional digital asset platform." It amounts to extending into the derivatives market the standards it has applied through Anchorage Digital Bank, the first federally chartered digital asset bank regulated by the U.S. Office of the Comptroller of the Currency (OCC). Affiliates also hold a BitLicense from the New York State Department of Financial Services (NYDFS) and a license from the Monetary Authority of Singapore (MAS).
The move comes as demand for crypto derivatives grows among institutional investors. If the swap dealer registration is approved, Anchorage will deal with institutional clients within the same federal regulatory framework as bank and brokerage dealers. Institutions will be able to assess counterparty risk on the same basis as with traditional financial institutions, which is expected to lower the barrier to hedging and adjusting positions using crypto options.
