Cboe Global Markets Realigns Digital Asset Business, Leveraging Strength and Expertise in Derivatives and Clearing

April 25, 2024
  • Company plans to transition digital asset derivatives trading and clearing into existing derivatives and clearing business lines
  • Plans to wind down Cboe Digital Spot Market in third quarter 2024

CHICAGO, April 25, 2024 – Cboe Global Markets, Inc. (Cboe: CBOE), the world's leading derivatives and securities exchange network, today announced plans to refocus its digital asset business to leverage its core strengths in derivatives, technology and product innovation while realizing operating efficiencies for both Cboe and its clients. These changes are being made as part of Cboe’s strategic review, taking into consideration the lack of regulatory clarity in the digital space, and are aligned with Cboe’s longer term strategy.

Cboe plans to transition and fully integrate its digital asset derivatives, currently offered by Cboe Digital, into its existing Global Derivatives and Clearing businesses. This move is expected to create efficiencies for Cboe and clients, while enabling Cboe to harness the power of its broader global derivatives franchise and global technology platform to support and fuel growth of the exchange-traded digital asset derivatives market.

Additionally, the company plans to wind down operations of the Cboe Digital Spot Market, the company’s spot digital asset trading platform, in the third quarter of 2024, subject to regulatory review. John Palmer, President of Cboe Digital, will become Head of U.S. Derivatives Market Development, under the leadership of Cathy Clay, EVP, Head of Global Derivatives.

Cboe plans to transition its cash-settled bitcoin and ether futures contracts, currently available for trading on the Cboe Digital Exchange to the Cboe Futures Exchange (CFE) in the first half of 2025, pending regulatory review and certain corporate approvals. This move will consolidate all Cboe U.S. futures products, including digital asset futures, onto one exchange powered by world-class technology, creating efficiencies for clients across the globe. By transitioning digital asset derivatives to CFE, this product set will benefit from the holistic support of the Cboe Global Derivatives business, including global derivatives sales and distribution, product development, market structure and investor education expertise.

“Refocusing our digital asset business enables us to refine our strategy, leveraging our core strengths in derivatives, technology excellence and product innovation to help maximize opportunities for our business and deliver efficiencies for Cboe and our clients,” said Fred Tomczyk, Chief Executive Officer of Cboe Global Markets. “We believe these changes enable greater optimization and strategic alignment for our business across geographies and asset classes, further supporting our long-term growth strategy.”

In addition, Cboe will maintain ownership and operation of Cboe Clear Digital, the clearing arm of Cboe Digital, and plans to align Cboe Clear Digital with Cboe Clear Europe, its European clearing house, under unified leadership. Cboe Clear Digital will continue to facilitate the clearing of bitcoin and ether futures. Cboe Clear Europe will continue to serve as the pan-European central clearing party (CCP) for Cboe’s European equities and derivatives exchanges across the EU, UK and Switzerland. Vikesh Patel, the current President of Cboe Clear Europe, will now also oversee U.S. clearing.

“Bringing digital asset derivatives and clearing into our existing business lines enables us to leverage the full breadth of our global derivatives team and unlock the full value of Cboe to our clients around the world,” said David Howson, Global President of Cboe. “We expect to continue to see greater demand for exchange-traded derivatives to help manage crypto exposures, hedge risk and enhance capital and operational efficiencies. Optimizing our derivatives and clearing business operations and product development across borders and asset classes enables us to better serve our diverse client base and sharpen our strategic focus.”

The company anticipates that the wind down of the Cboe Digital Spot Market operations will have an immaterial impact on Cboe’s net revenue in 2024. The company estimates that expense savings will be in the range of $2 million to $4 million in 2024, with savings expected to be in the $11 million to $15 million range on a normalized annual basis. Cboe will provide more details about these strategic changes during its forthcoming first-quarter 2024 earnings call on May 3, 2024. A conference call with remarks by the company's senior management will begin at 7:30 a.m. CT (8:30 a.m. ET). A live audio webcast for the conference call and the presentation that will be referenced during the call will be available on the Investor Relations section of Cboe's website at ir.cboe.com under Events.


About Cboe Global Markets

Cboe Global Markets (Cboe: CBOE), the world's leading derivatives and securities exchange network, delivers cutting-edge trading, clearing and investment solutions to people around the world. Cboe provides trading solutions and products in multiple asset classes, including equities, derivatives, FX, and digital assets, across North America, Europe and Asia Pacific. Above all, we are committed to building a trusted, inclusive global marketplace that enables people to pursue a sustainable financial future. To learn more about the Exchange for the World Stage, visit www.cboe.com.

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Cboe Digital Futures are currently offered through Cboe Digital Exchange, LLC, a CFTC registered DCM and Cboe Clear Digital, LLC, a CFTC registered DCO. The CFTC does not have regulatory oversight authority over certain virtual currency products including spot market trading of virtual currencies. Cboe Digital's Spot Market is not licensed, approved or registered with the CFTC and transactions on the Cboe Digital Spot Market are not subject to CFTC rules, regulations or regulatory oversight. The Cboe Digital Spot Market may be subject to certain state licensing requirements and currently operates in NY pursuant to Cboe Clear Digital license ("BitLicense") to engage in virtual currency business activity by the New York State Department of Financial Services.

There are important risks associated with transacting in any of the Cboe Company products and digital assets discussed here. Before engaging in any transactions in those products and digital assets, it is important for market participants to carefully review the disclosures and disclaimers contained at: https://www.cboe.com/us_disclaimers/.

Trading in futures is not suitable for all market participants and involves the risk of loss, which can be substantial and can exceed the amount of money deposited for a futures position. You should, therefore, carefully consider whether trading in futures is suitable for you in light of your circumstances and financial resources. You should put at risk only funds that you can afford to lose without affecting your lifestyle. For additional information regarding the risks associated with trading futures see the Risk Disclosure Statement Referenced in CFTC Letter 16-82.

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Some factors that could cause actual results to differ include: the loss of our right to exclusively list and trade certain index options and futures products; economic, political and market conditions; compliance with legal and regulatory obligations; price competition and consolidation in our industry; decreases in trading or clearing volumes, market data fees or a shift in the mix of products traded on our exchanges; legislative or regulatory changes or changes in tax regimes; our ability to protect our systems and communication networks from security vulnerabilities and breaches; our ability to attract and retain skilled management and other personnel; increasing competition by foreign and domestic entities; our dependence on and exposure to risk from third parties; global expansion of operations; factors that impact the quality and integrity of our and other applicable indices; our ability to manage our growth and strategic acquisitions or alliances effectively; our ability to operate our business without violating the intellectual property rights of others and the costs associated with protecting our intellectual property rights; our ability to minimize the risks, including our credit, counterparty, investment, and default risks, associated with operating a European clearinghouse; our ability to accommodate trading and clearing volume and transaction traffic, including significant increases, without failure or degradation of performance of our systems; misconduct by those who use our markets or our products or for whom we clear transactions; challenges to our use of open source software code; our ability to meet our compliance obligations, including managing potential conflicts between our regulatory responsibilities and our for-profit status; our ability to maintain BIDS Trading as an independently managed and operated trading venue, separate from and not integrated with our registered national securities exchanges; damage to our reputation; the ability of our compliance and risk management methods to effectively monitor and manage our risks; restrictions imposed by our debt obligations and our ability to make payments on or refinance our debt obligations; our ability to maintain an investment grade credit rating; impairment of our goodwill, long-lived assets, investments or intangible assets; the impacts of pandemics; the accuracy of our estimates and expectations; litigation risks and other liabilities; and risks relating to digital assets, including winding down the Cboe Digital spot crypto market, operating a digital assets futures clearinghouse, cybercrime, changes in digital asset regulation, and fluctuations in digital asset prices. More detailed information about factors that may affect our actual results to differ may be found in our filings with the SEC, including in our Annual Report on Form 10-K for the year ended December 31, 2023 and other filings made from time to time with the SEC.

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