CME and Cboe Bitcoin Futures are a "Unique Animal" Capable of Price Manipulation

Two major firms, Chicago Mercantile Exchange (CME Group Inc) and Chicago Board Options Exchange (Cboe), are set to offer bitcoin futures this month. One grave fear is price manipulation, as the industry’s principal regulator, Commodity Futures Trading Commission (CFTC), explained in an interview this morning.

Also read: Peer-to-Peer Bitcoiner Gets Year in Prison for Being Unlicensed

Bitcoin Futures “A Unique Animal Unlike Any Commodity”

Affable CFTC regulator, Chief Market Intelligence Officer, Andrew Busch described this morning the coming futures scenario as “a pretty exciting time” on CNBC’s Squawk Box.

The CFTC is the main regulator of industry contracts, and is anticipating cryptocurrencies into its policy scheme.

CME and Cboe Bitcoin Futures are a "Unique Animal" Capable of Price Manipulation

“I think it’s really important for people to understand,” Mr. Busch continued, “the process by which a new contract gets created, by the CME and other exchanges, there are two paths you can go down: a self-certification process and then there’s a written approval process,” he clarified.

CFTC has been on the defensive for a while, as market heavies such as Interactive Brokers and its chairman, Thomas Peterffy, took a full page advertisement to warn against and actively urge such contracts be separated from the rest.

“Most of these guys come through with self-certification,” Mr. Busch noted. “We get involved and take a look at things because bitcoin is so unusual. Our chairman has said this is a unique animal unlike any commodity we’ve looked at before.”

Manipulation

“We got involved with them earlier in the process. We modified, or encouraged them to modify, parts of the contract. The margin is much higher than what they originally came to us at,” Mr. Busch acknowledged.

An interviewer interrupted, “Is Read More Here