Bitcoin Futures Plan Criticized by Brokers for Overlooking Risks

(Bloomberg) — Some of the world’s biggest derivatives brokerages criticized plans to offer bitcoin futures and options on U.S. exchanges, telling regulators that the contracts have been rushed to market without proper consideration of the risks.

The Futures Industry Association, whose members include Goldman Sachs Group Inc (NYSE:GS)., JPMorgan Chase & Co (NYSE:JPM). and Citigroup Inc (NYSE:C)., detailed its concerns in a letter to the Commodity Futures Trading Commission on Wednesday. The association said there should have been more discussion about margin levels, trading limits, stress tests and clearing before the contracts were given a green light.

CME Group Inc. (NASDAQ:CME) and Cboe Global Markets Inc. were the first bourses to approve bitcoin derivatives, paving the way for mainstream investors to participate in a volatile and largely unregulated market that some have called a bubble. Cboe will start trading futures on Dec. 10, while CME’s contracts are set to debut on Dec. 18. The exchanges were allowed to offer the products after pledging to regulators that they comply with the law, and the contracts will be subject to CFTC oversight…

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