Crypto lawyer Jake Chervinsky has determined that Bakkt does not need direct approval from the Commodity Futures Trading Commission (CFTC) to launch the physical Bitcoin futures, so it appears the launch date will proceed as scheduled.
The cryptocurrency markets are highly anticipating the launch of physical Bitcoin futures on Bakkt on 12 December 2018. It is a new cryptocurrency exchange which will be owned by the Intercontinental Exchange (ICE), the same organization that runs the New York Stock Exchange (NYSE).
14/ A designated contract market like ICE can file a self-certification submission as late as one business day before initial listing.
That means ICE technically doesn't have to file Bakkt's papers until Tuesday, December 11 for Bakkt to launch futures on Wednesday, December 12.
— Jake Chervinsky (@jchervinsky) November 6, 2018
According to Chervinsky, ICE is a CFTC certified designated contract market, allowing it to self-certify new futures offerings without any prior approval. ICE and Bakkt can submit the filing for physical Bitcoin futures as soon as one day before launch. Chervinsky says the CFTC will probably publish a press release about the futures when the self-certification occurs.
16/ Consider the process that CME & CBOE went through to get approval for their bitcoin futures last year.
Both of them ended up self-certifying, but only after *months* of negotiations with the CFTC & changes to their products.
The CFTC explains here: (https://t.co/B0tuugmPDx)
— Jake Chervinsky (@jchervinsky) November 6, 2018
However, if the CFTC disapproves of the physical Bitcoin futures, they could find some way to block them after launch. At this time, there is no evidence that this will happen otherwise, the controversy would have already been underway as seen when cash-settled Bitcoin futures were launched on the Chicago Mercantile Exchange (CME) and Chicago Board Options Exchange (CBoE). It took months of negotiations for CME and CBoE to reach an agreement with the CFTC, even though those exchanges can self-certify like Bakkt.
Bakkt CEO Kelly Loeffler indicates that the plans for the physical Bitcoin futures would be reviewed and approved by the CFTC before launch, probably to maintain 100% compliance with regulators and avoid problems in the future.
The reason the Bakkt physical Bitcoin futures are important is that they would allow institutional investors to buy Bitcoin in a safe and regulated way on major stock trading platforms. The futures settle the same day and investors receive actual Bitcoin in their accounts, unlike the cash settled futures in Chicago. Market demand for the physical Bitcoin futures is expected increase demand on Bitcoin spot markets, which could possibly lead to a major Bitcoin price increase.
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