Anchorage Digital Applies to the CFTC for Swap Dealer Registration to Expand Its Crypto Options Business

ChainCatcher report: Anchorage Digital, an institutional-grade crypto platform, has submitted an application to register as a swap dealer with the U.S. Commodity Futures Trading Commission (CFTC) to expand its institutional crypto options business. The application was filed with the National Futures Association (NFA) under the entity Anchorage Digital Swap Dealer, LLC and is currently pending NFA review. Nathan McCauley, CEO and co-founder of the company, did not provide a timeline for completion of the review, stating that further updates will be shared at the appropriate time. McCauley noted that, if approved, Anchorage Digital Swap Dealer plans to offer European-style options on Bitcoin and Ethereum with maturities of up to one year, with additional products to follow subject to internal approval processes and regulatory requirements. Upon registration, institutional clients will be able to trade digital asset derivatives with CFTC-registered counterparties while also leveraging Anchorage Digital’s existing custody and other services. Anchorage Digital stated that growth in its current options business has primarily come from public companies holding Bitcoin and Ethereum on their balance sheets, with contributions also coming from asset managers and funds using options to hedge exposure. Anchorage Digital Bank, N.A., which became the first federally chartered digital asset bank in 2021 under the supervision of the Office of the Comptroller of the Currency, will ensure that the swap dealer entity complies with CFTC requirements regarding capital, risk management, and margin, adhering to the same regulatory framework applied to banks in interest rate, credit, and foreign exchange markets under the Dodd-Frank Act. In March of this year, Anchorage Digital added collateral management functionality to its Atlas platform, and in December last year, it acquired Securitize’s wealth management division.