September 29, 2023

Christopher J. Kirkpatrick

Secretary

Commodity Futures Trading Commission

Three Lafayette Centre

1155 21st Street, N.W.

Washington, D.C. 20581

Re: Cboe Digital Exchange, LLC Product and Rule Certification for Margin Futures on Bitcoin 

and Ether Submission Number CDE-2023-04E

Dear Mr. Kirkpatrick:

Pursuant to Section 5c(c)(1) of the Commodity Exchange Act, as amended (“Act”), and Regulation 40.2 

and Regulation 40.6, including 40.6(a)(6)(ii), of the regulations promulgated by the Commodity Futures 

Trading Commission (“CFTC” or “Commission”) under the Act, Cboe Digital Exchange, LLC (“CDE” or 

“Exchange”) hereby submits this emergency rule filing to re-certify its physically-settled ETH and BTC 

futures contracts (the “Products”). 

This submission contains the following:

• A description of the emergency rules; 

• A summary of the terms and conditions of the Products, included in a copy of the Products’ contract 

specifications attached as Exhibit A; 

• A summary of the rule changes being made as part of the Amendment to incorporate the Products into 

CDE’s rules, and the rule changes attached as Exhibit B; 

• An explanation and analysis of the Products’ and the Amendment’s compliance with the applicable 

provisions of the Act, including the Designated Contract Market (“DCM”) Core Principles (“Core 

Principles”), and the Commission regulations thereunder;

• A certification that the Products and Amendment comply with the Act and Commission regulations 

thereunder;

• A certification of a notice of pending product and rule certification with the Commission and a copy 

of the submission on the Exchange’s website.

The re-certification of the terms and conditions for the Products and the Amendment will become 

effective on September 30, 2023 (“Effective Date”). 

Emergency Rules

This emergency product re-certification is being implemented to respond to an emergency as defined 

in CFTC Rule 40.1 and Exchange Rule 212. Specifically, the Exchange believes, and it is in the opinion of 

persons duly authorized, that immediate implementation of this emergency product certification required in 

response to a circumstance which may have a severe, adverse effect upon the functioning of the Exchange as 

a registered entity. In light of a pending government shut down coinciding with a potential risk of dormancy, 

the Exchange is of the opinion that it is necessary to re-certify the Products to allow for trading to continue 

on the Exchange. 
Products Description

The Exchange plans to re-certify and list physically-settled bitcoin futures (“BTC”) and physically-settled 

Ether futures (“ETH”), with the specification detailed in Exhibit A. The Exchange has previously certified 

and listed and traded the Products. The Products are fully funded at the time of execution, with final settlement 

at the execution price. As such, the Products do not require any transfers of assets as part of a variation margin 

process. On a daily basis there is a closing price, calculated pursuant to Exchange Rule 906. Because the 

Products are fully-funded at the time of execution, the daily closing or settlement price for these Products are 

relevant only for purposes of providing market participants with statements. The Exchange notes that all 

contract specifications are identical to the specifications of the Products when prior certified and listed on the 

Exchange. Additionally, and pursuant to Exchange Rule 503, the Exchange will allow block trading hours on 

Saturday. 

Regarding the underlying digital assets, the Exchange currently operates a digital asset spot market, 

separate from its DCM (“Cboe Digital Spot Market”). The Cboe Digital Spot Market is regulated as a money 

services business (“MSB’) under Financial Crimes Enforcement Network (FinCEN) and is licensed in various 

states in accordance with state money transmitter licensing (“MTL”) requirements. The Exchange implements 

best practices of a traditional financial market surveillance program designed around CFTC Core Principals

and which was established to enforce the rules of our spot market to help protect investors and the integrity 

of our markets. Participation in the Cboe Digital Spot Market is governed by a comprehensive Rulebook and 

membership requirements, and subject to substantially the same market surveillance program as for Cboe 

Digital’s futures market. The Cboe Digital Spot Market offers trading in bitcoin (BTC) and Ether (ETH) in 

U.S dollars on a central limit order book (“CLOB”), which allows for continuous interactions between fullydisplayed marketable orders and limit orders. Cboe Digital Exchange requires all orders placed in BTC and 

ETH on its spot market to be fully-funded.

Rule Changes

While the Exchange currently has the authority pursuant to Exchange Rule 503 to determine the

Business Days and Holidays of the Exchange and the Trading Hours and Block Trading Hours for each 

Contract, the Exchange is updating Rules 1101 (Bitcoin Futures) and 1102 (Ether Futures) to make clear in 

the contracts specifications for the Products currently in such Rules that the Exchange is open for block 

trading on Saturdays. The rule updates are reflected in Exhibit B.

Compliance

CDE believes that the Products and the Amendment are consistent with the DCM Core Principles 

under Section 5 of the Act. In particular, CDE believes that the Products and the Amendment are consistent 

with the following DCM Core Principles:

DCM Core Principle 2 (Compliance with Rules) because CDE Rules include prohibitions against 

market manipulation and fraudulent, non-competitive, and disruptive trading practices that will apply to 

trading activity in the Products and CDE will conduct monitoring and surveillance of trading in the Product 

for compliance with CDE Rules;

DCM Core Principle 3 (Contracts not Readily Susceptible to Manipulation) because of, among other 

things, the following factors:
• The Products are fully funded and physically settled and, therefore, the financial incentive for 

manipulation is greatly outweighed by the cost. Specifically, an attempt to manipulate, corner, squeeze 

or congest final settlement, or attempt to do so would be unsuccessful. A market participant must post 

the underlying commodity to the Clearinghouse before they may sell the Contracts on the Exchange, 

so the necessary deliverable supply will be available at all times;

• Due to the lack of variation margin, any attempts to manipulate daily settlement prices will not provide 

a benefit to a market participant because the mark-to-market price movements will not result in any 

additional funds being available for trading or profit that can be withdrawn;

• The settlement price will be based on a weighted average price from executed trades on the 

Exchange’s spot market during a specified period on each trading day or, based upon a third party or 

combination of third party index or reference prices during the settlement period so as to mitigate the 

influence of trades executed as outliers;

• The underlying digital asset market is a highly liquid and capitalized market, wherein the dollar value 

of bitcoin volume is currently approximately $3.6. billion and the dollar value of ether volume is 

currently approximately $1.36 billion;

• The Products are subject to Rule 530, which governs position limits. Position limits apply to all 

accounts for which a person directly or indirectly owns (more than 10% ownership) or controls the 

trading, and all positions held by persons acting pursuant to an agreement. As described above, the 

position limits for the Products are substantially the same as position limits imposed for similar 

products on other DCMs;

• The Exchange operates the Cboe Digital Spot Market, from which the settlement prices for the 

Products are derived from the trades executed on the Cboe Digital Spot Market in the underlying 

digital assets. As stated above, participation on the Cboe Digital Spot Market is governed by a 

comprehensive Rulebook and membership requirements, and is subject to substantially the same 

regulatory market surveillance program as for its futures market, including real-time monitoring of 

and alerts for orders and trades and the ability to impose sanctions on market participants identified

as conducting any market manipulation or attempt to manipulate the market in any spot contract on 

Cboe Digital. Such rules and oversight capacity ensure that the digital assets underlying the Products 

are not readily susceptible to manipulation. The Exchange notes that all participants on the Cboe 

Digital Spot Market are subject to rigorous AML/KYC checks and procedures during the onboarding 

process; 

DCM Core Principle 4 (Prevention of Market Disruption) because CDE Rules prohibit participants 

from manipulating the market in, disrupting the orderly functioning of the market in, or creating a condition 

in which prices do not or will not reflect fair market values in the Products, and CDE enforces compliance 

with such CDE Rules;

DCM Core Principle 5 (Position Limits or Accountability) because the Products’ contract 

specification establish, as they had when previously certified and listed, an appropriate initial position limit 

for the Products that will serve to reduce the potential for market manipulation in the Products;

DCM Core Principle 7 (Availability of General Information) because the contract specifications for 

each Product will be posted and maintained on CDE’s website;

DCM Core Principle 8 (Daily Publication of Trading Information) because in that volume, open 

interest, settlement prices, and other price information for the Products will be made available publicly on a 

daily basis on CDE’s website consistent with CFTC Regulation 16.01;

DCM Core Principle 9 (Execution of Transactions) because CDE will make the Products available 
for trading on CDE’s trading system. This provides for a competitive, open, and efficient market and 

mechanism for executing transactions that protects the price discovery process of trading on CDE’s 

centralized market. Block trades in Products must be submitted and reporting pursuant to the CDE block 

trading rules;

DCM Core Principle 10 (Trade Information) because CDE will maintain trade information for the 

Products as part of its audit trail and this information will be accessible to CDE Regulation for regulatory 

surveillance and enforcement purposes;

DCM Core Principle 11 (Financial Integrity of Transactions) because the Products will be cleared by 

CCD, which is registered with the Commission as a DCO and is subject to the provisions of the Act and 

CFTC regulations relating to DCOs;

DCM Core Principle 12 (Protection of Markets and Market Participants) because the CDE Rules 

include prohibitions against abusive practices, including abusive practices committed by a party acting as an 

agent for a participant, that will apply in relation to the Products, and promote fair and equitable trading in 

the Products;

DCM Core Principle 13 (Disciplinary Procedures) because CDE maintains disciplinary procedures 

and rules that authorize the Exchange to discipline market participants that commit CDE rule violations, 

including any rule violations relating to the Products; 

DCM Core Principle 14 (Dispute Resolution) because the CDE Rules provide a mechanism for market 

participants to arbitrate disputes that arise out of transactions executed on or subject to the rules of the 

Exchange, including transactions in the Products;

DCM Core Principle 18 (Recordkeeping) because CDE’s recordkeeping procedures, established 

pursuant to Commission Regulation 1.31, will apply with respect to Exchange records relating to the Product, 

including trade records and investigatory and disciplinary files;

DCM Core Principle 19 (Antitrust Considerations) because the listing of the Products may promote 

competition with digital asset futures products that are offered for trading on other markets; and 

DCM Core Principle 20 (System Safeguards) because CDE maintains system safeguards controls and 

procedures for its operations and automated systems that will be utilized to facilitate trading in the Products.

Certification

CDE believes that the impact of the Products offering and the Amendment will be beneficial to the 

public and market participants. CDE is not aware of any substantive opposing views to the Amendment. CDE 

hereby certifies that the listing of the Products and the Amendment complies with the Act and the regulations 

thereunder. CDE further certifies that it will post a notice of pending certification with the Commission and 

a copy of this submission on the Cboe Digital website (https://www.cboedigital.com/regulation/exchangenotices/) concurrent with the filing of this submission with the Commission.

Questions regarding this submission may be directed to Rebecca Tenuta at rtenuta@cboe.com or (312) 

786-7570. 

Sincerely, 
/s/ Rebecca Tenuta

Rebecca Tenuta

Senior Counsel 

rtenuta@cboe.com

(773) 485-7926
Exhibit A

Contract Specifications

Bitcoin Futures

Description A fully funded physically settled futures contract for Bitcoin

Contract Symbol BTC

Contract Size 0.1 Bitcoin

Price Quotation USD per 1 Bitcoin

Minimum Price 

Increment

$ 1.00 per Bitcoin ($0.10 per contract)

Block Trades can be negotiated in $0.01 increments

Minimum Block 

Size

10 Contracts

Listed Contracts Quarterly contracts

Settlement Physical Delivery

Trading Hours

Sunday - Friday, 17:00 – 16:00 (CT)

Block Trading Hours: Sunday - Friday, 17:00 – 16:00 (CT); 

Saturday, 08:00-16:00 (CT)

Daily Closing Time 16:00 (CT)

Last Trading 

Day/Time

10:00 (CT) Last Friday* of the contract month

* Preceding business day if day falls on a non-business day

Position Limit 200,000 Contracts

Large Trader 

Reporting

25 Contracts
Description A fully funded physically settled futures contract for Bitcoin

Collateral Withheld

Buyer USD: No. of Contracts * Contract Size * Trade Price

Seller BTC: No. of Contracts * Contract Size

Ether Futures

Description A fully funded physically settled futures contract for the Ether

Contract Symbol ETH

Contract Size 1 Ether

Price Quotation USD per 1 Ether

Minimum Price 

Increment

$ 0.10 per Ether ($0.10 per contract)

Block Trades can be negotiated in $0.01 increments

Minimum Block 

Size

50 Contracts

Listed Contracts Quarterly contracts

Settlement Physical Delivery

Trading Hours

Saturday - Friday, 17:00 – 16:00 (CT)

Block Trading Hours: Sunday - Friday, 17:00 – 16:00 (CT); 

Saturday, 08:00-16:00 (CT)

Daily Closing Time 16:00 CT

Last Trading 

Day/Time

10:00 (CT) Last Friday* of the contract month

* Preceding business day if day falls on a non-business day

Position Limit 75,000 Contracts
Description A fully funded physically settled futures contract for the Ether

Large Trader 

Reporting

25 Contracts

Collateral Withheld

Buyer USD: No. of Contracts * Contract Size * Trade Price

Seller ETH: No. of Contracts * Contract Size
Exhibit B

Cboe Digital Exchange Rulebook

(additions underlined)

* * * * *

RULE 1101. Bitcoin Futures

Bitcoin Futures

Description A fully funded physically settled futures contract for Bitcoin

Contract 

Symbol BTC

Contract Size 0.1 Coin

Price 

Quotation USD per 1 coin

Minimum

Price 

Increment

$1.00 per Bitcoin ($0.10 per contract)

Listed 

Contracts

Up to 5 Daily expirations, 4 Weekly expirations, nearest 2 serial months and 

nearest 2 quarterly months.

Settlement Physical Delivery

Trading Hours Regular Trading Hours as determined by the Exchange from time to time.

Sunday - Friday, 17:00 – 16:00 (CT)

Block Trading Hours: Sunday - Friday, 17:00 – 16:00 (CT); Saturday, 08:00-

16:00 (CT)

Daily Closing

Time 16:00 (CT)

Last Trading 

Day/Time

Daily - 10:00 (CT) of the expiry day

Weekly - 10:00 (CT) Friday* of the expiry Week

Monthly - 10:00 (CT) Last Friday* of the contract month

* Preceding business day if day falls on a non-business day

Block Trade 

Minimum 10 Contracts

Position Limit 200,000 Contracts

Large Trader 

Reporting 25 Contracts

Collateral 

Withheld

Buyer: No. of Contracts * Contract Size * Trade Price 

Seller: No. of Contracts * Contract Size

Delivery

Pursuant to the Cboe Clear Digital rulebook, purchase price of the future and 

the underlying deliverable commodity are deposited with the Clearinghouse 

(in accordance with Cboe Clear Digital Rules 403 and 315) by the buyer and 

seller, respectively, prior to the futures trade. Therefore, delivery is made 

through the Clearinghouse to the buyer’s account. Further information about 

delivery can be found in Cboe Clear Digital Rule 410.

Forks Support for forks in the underlying product will be evaluated in accordance 

with the Cboe Digital Fork Policy
400 South LaSalle Street › Chicago, IL 60605 › cboe.com

RULE 1102. Ether Futures

Description A fully funded physically settled futures contract for Ether

Contract Symbol ETH

Contract Size 1 Coin

Price Quotation USD per 1 coin

Minimum Price Increment $0.10 per Ether ($0.10 per contract)

Listed Contracts Up to 5 Daily expirations, 3 Weekly expirations, nearest 2 serial 

months and nearest 2 quarterly months.

Settlement Physical Delivery

Trading Hours Sunday - Friday, 17:00 – 16:00 (CT)

Block Trading Hours: Sunday - Friday, 17:00 – 16:00 (CT); 

Saturday, 08:00-16:00 (CT)

Daily Closing Time 16:00 (CT)

Last Trading Day/Time

Daily - 10:00 (CT) of the expiry day

Weekly - 10:00 (CT) Friday* of the expiry Week

Monthly - 10:00 (CT) Last Friday* of the contract month

* Preceding business day if day falls on a non-business day

Position Limit 75,000

Large Trade Reporting 25 Contracts

Collateral Withheld Buyer: No. of Contracts * Contract Size * Trade Price 

Seller: No. of Contracts * Contract Size

Delivery

Pursuant to the Cboe Clear Digital rulebook, purchase price of the 

future and the underlying deliverable commodity are deposited with the

Clearinghouse (in accordance with Cboe Clear Digital Rules 403 and 

315) by the buyer and seller prior to the futures trade. Therefore, 

delivery is made through the Clearinghouse to the buyer’s account.

Further information about delivery can be found in Cboe Clear Digital 

Rule 410.

Forks Any forks in the underlying blockchain for the digital asset will be 

evaluated in accordance with Exchange Rule 911.
11

* * * * *