Anchorage Digital seeks CFTC swap dealer registration for crypto options business

Institutional crypto platform Anchorage Digital has filed an application to register a swap dealer with the Commodity Futures Trading Commission as it looks to expand its institutional crypto options business.

The application was submitted to the National Futures Association through Anchorage Digital Swap Dealer, LLC, according to a statement shared exclusively with The Block.

Anchorage is now awaiting registration while the NFA reviews its application. CEO and co-founder Nathan McCauley offered no estimate of when that process might finish, but said the company would share further updates as appropriate. "We aren't in a position to speculate on timing," he told The Block.

If the application is approved, McCauley said Anchorage Digital Swap Dealer expects to offer European-style options on bitcoin Bitcoin (BTC) and ether Ethereum (ETH), with maturities ranging up to one year. The firm intends to add more products later, he added, subject to its own approval process and regulatory requirements. 

McCauley said that once registration is complete, institutional clients would be able to trade digital asset derivatives with a CFTC-registered counterparty alongside use of Anchorage Digital's existing custody and other services.

Anchorage's existing options business

Much of Anchorage's existing options business growth has come from public companies holding bitcoin and ether on their balance sheets, the firm said in the statement, while asset managers and funds using options to manage their exposure have also contributed. McCauley would not disclose specific trading volumes or growth figures when asked by The Block, and declined to explain how Anchorage had previously arranged options trades for clients.

"What we can say is that institutional demand for regulated access to digital asset derivatives continues to grow, and establishing a dedicated swap dealer entity is part of how we're building the infrastructure to meet it," he said.

Anchorage Digital Bank, N.A. became the first federally chartered digital asset bank in 2021 and is regulated by the Office of the Comptroller of the Currency. The swap dealer entity would face CFTC requirements for capital, risk management, and margin, using the same framework the Dodd-Frank Act applied to the banks for interest rate, credit, and FX markets, the firm said.

"It will bring our options business under the same federal framework as the dealers they already face," McCauley said in the statement.

In March, Anchorage Digital added collateral management to its Atlas platform, including 24/7 monitoring and automated margin calls for loans, derivatives, and other institutional transactions, The Block reported at the time. It also acquired Securitize's wealth management unit in December to expand its federally regulated crypto services for registered investment advisors.