November 16, 2023

Via CFTC Portal Submissions

Mr. Christopher Kirkpatrick

Secretary of the Commission

Office of the Secretar

Commodity Futures Trading Commission

3 Lafayette Centre

1155 21

st Street, N.W.

Washington D.C. 20581

RE: Self-Certification of Product: Avalanche Touch Bracket Contracts – Submissi

Pursuant to Commission Regulation §40.2(a)

Dear Mr. Kirkpatrick:

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

§40.2(a) of the regulations promulgated by the Commodity Futures Trading Commission (the

“Commission”) under the Act (the “Regulations”), North American Derivatives Exchange, Inc.

d/b/a Crypto.com | Derivatives North America (“CDNA” or the “Exchange”) hereby self-certifi

the terms and conditions for a cryptocurrency commodity product (the “AVAX Crypto Contract”):

AVALANCHE CRYPTOCURRENCY TOUCH BRACKET CONTRACTS

The Exchange has self-certified multiple cryptocurrency contracts in the past, including Tou

Bracket Contracts on Bitcoin (BTC) and Ether (ETH) on October 28, 2022, Touch Bracket

Contracts on Litecoin (LTC) and Dogecoin (DOGE) on June 21, 2023, Touch Bracket Contracts on

Bitcoin Cash (BCH) on September 26, 2023, Touch Bracket Contracts on Shib Inu (SHIB) on

October 31, 2023, BTC and ETH Event Contracts on April 10, 2023, BCH and LTC Event Contracts

on October 27, 2023 and October 30, 2023, respectively, and SHIB and DOGE Event Contracts on

November 8, 2023. In addition, the Exchange has listed both Event Contracts and Call Spread

Contracts based on the Underlying bitcoin market at various times since 2014.

1 Since launching

the BTC, ETH, LTC and BCH Touch Bracket Contracts in 2023, combined trading volumes of

these contracts totals over 830,000 contracts. Therefore, the Exchange continues to expand its

cryptocurrency commodity derivative product offerings to meet public demand for diverse and

regulated products.

2

2 We use the terms “cryptocurrency” and “digital asset” interchangeably in this filin

1 Unless otherwise defined herein, capitalized terms shall have the same definition as set forth in Rule 1.1 of

Exchange Rulebook. Touch Bracket Variable Payout Contracts are also referred to as “Knock-out Touch Bracket

Contracts” or “UpDown Touch Bracket Contracts” or “Knock-outs” or “UpDown Options”.

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The new AVAX Crypto Contracts will be cash-settled and will operate in the same fashion as the

Exchange’s currently listed Touch Bracket Contracts, including the BTC, ETH, LTC, and DOGE

Touch Bracket Contracts. Touch Bracket Contracts are not only quite popular in markets with

high volatility, such as the cryptocurrency markets, but due to their unique structure, inherently

minimize the possibility of contract manipulation.

A Touch Bracket Contract is a type of Variable Payout Contract and is similar to a Call Spread in

that it contains a predetermined Ceiling and Floor price level. However, unlike a Call Spread

Contract, if the Underlying market, as reflected in the corresponding Indicative Index, for a Tou

Bracket Contract equals or moves through (i.e., “touches”) either the Ceiling or Floor level of a

Touch Bracket at any time prior to the listed Expiration time, the Touch Bracket Contract will

immediately expire. In the event the Underlying market does not touch the Ceiling or Floor prior

to its listed Expiration time, the Touch Bracket will expire at the listed Expiration time, which will

occur on the last trading day of the week. Accordingly, the Exchange categorizes its Touch

Bracket Contracts as “weekly” Contracts.

The value of the AVAX Crypto Contracts is based upon the pricing characteristics of each

cryptocurrency commodity

3 and will be as $100 for each AVAX Crypto Contract. The Expiration

Value of the AVAX Crypto Contracts will be the Indicative Index value calculated by the

Exchange at the time that Indicative Index Value either equals or is greater than the Contract’s

Ceiling, is equal to or less than the Contract’s Floor, or at the listed Expiration if the Contract is

not knocked-out early. Because a Touch Bracket Contract will always expire concurrent with the

Indicative Index Value that will be used to determine the settlement of the Contract, it is

impossible for the final Expiration Value to be published prior to the expiration of the Exchan

Contract. No trading in the listed Contract will occur following expiration of the Contract.

Moreover, the Indicative Index Value is calculated using Underlying bid/ask midpoint prices

leading up to the Contract’s expiration. Therefore, no price action in the Underlying markets

following expiration of the Exchange Contracts will impact the final settlement of the Exchan

Contracts. Finally, consistent with all other Contracts currently traded on the Exchange, the

AVAX Crypto Contracts will be fully collateralized.

3 Virtual currencies have been broadly identified by the Commission as “commodities” in various filings. See, e

CFTC v. Changpeng Zhao, Binance Holdings Limited, Binance Holdings (IE) Limited, Binance (Services) Holdings

Limited, and Samuel Lim (filed Mar. 27, 2023) (N.D. Ill.) at ¶ 24 (stating “Certain digital assets, including BTC, ET

DOGE, and at least two fiat-backed stablecoins, tether (‘USDT’) and the Binance USD (‘BUSD’), as well as other virtu

currencies as alleged herein, are ‘commodities,’ as defined under Section 1a(9) of the Act, 7 U.S.C. § 1a(9)”). See Als

In re Tether Holdings Ltd., et al., CFTC Docket No. 22-04 (Oct. 15, 2021) (stating “Digital assets such as bitcoin, ether,

litecoin, and tether tokens are commodities.”) and CFTC v HDR Global Trading Ltd., et al. (d/b/a BitMEX), 20-cv-8132,

(filed October 01, 2020) (S.D.N.Y) at ¶ 23 (stating “Bitcoin, ether, Litecoin, and other virtual currencies [emph. adde

are distinct from ‘real’ or ‘fiat’ currencies, which are the coin and paper money of the United States or another count

that are designated as legal tender, circulate, and are customarily used and accepted as a medium of exchange in the

country of issuance. Digital assets, such as bitcoin, ether, and litecoin are ‘commodities’ as defined under Secti

1a(9) of the Act, 7 U.S.C. § 1a(9) (2018)”) (emph. added). AVAX has been in existence for over two years and

operates as a digital asset or virtual currency because, among other reasons, (1) it is used as a transfer of value and

(2) because it is used for payments. Indeed, the digital asset in this filing is captured under the authority of the CFT

as well as the broad definition of commodity in Section 1a(9) of the Ac

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Each AVAX Crypto Contract will be listed with 4 concurrent brackets of the same width, but each

with its own offset to the Underlying market. This structure allows a participant who wants to

express the opinion that they believe the market is going down by selling the same positive risk

to reward composition as a trader who believes the market is going to go higher and therefore

wants to buy. For example, if the Indicative Index Value of AVAX is 9.20 just before the contract

creation, and each bracket has a range of 5 points, the following brackets could be generated:

Bracket 1: 9.60 (Ceiling) - 9.10 (Floor) (4:15PM)

Bracket 2: 9.50 (Ceiling) - 9.0 (Floor) (4:15PM)

Bracket 3: 9.40 (Ceiling) - 8.90(Floor) (4:15PM)

Bracket 4: 9.30 (Ceiling) - 8.80 (Floor) (4:15PM)

Additionally, each AVAX Crypto Contract will have a tick size equivalent to 0.005 per point, with

a tick value of $1.00, and a contract value of $100. As a type of Variable Payout Contract, the

AVAX Crypto Contract will have a variable payout at settlement. The settlement payout, or

Settlement Value, is dependent on the difference between the Opening Trade Value and the

Closing Trade Value or Expiration Value.

The Exchange plans to list the AVAX Crypto Contracts based on the Underlying AVAX

cryptocurrency commodity market and settle the AVAX Crypto Contracts using data from the

“ICE Cryptocurrency Data” feed (“ICE Crypto Data”'), distributed by ICE Data

® Connectivity and

Feeds, Inc. (“IDCF”), as well as data from Lukka Inc. (the Lukka Data Feed (“LDF”).

The Indicative Index for the AVAX Crypto Contracts will be determined by using the Exchange’s

standard Indicative Index calculation method (the “the Exchange Calculation Method”).

4 The

Exchange will calculate and produce an Index Value for each cryptocurrency once each second

throughout the life of the AVAX Crypto Event Contracts. That is, each second the Exchange will

calculate an Index Value for the respective cryptocurrency by taking all bids/ask midpoint prices

in the relevant Underlying markets, as reported in the ICE

® Crypto Data and the Lukka, Inc. Data

Feed (as further described below), in the sixty (60) seconds leading up to the Calculation Time,

provided at least twenty-five (25) bids/ask midpoint prices are captured during the sixty (6

second period, removing the highest twenty (20) percent of Underlying bids/ask midpoint prices

and the lowest twenty (20) percent of Underlying bids/ask midpoint prices from the data set

5

,

and using the remaining Underlying bids/ask midpoint prices to calculate the relevant

cryptocurrency Index Value for that second. The calculation used is a simple average of the

remaining Underlying bids/ask midpoint prices in the data set, rounded to one decimal point

5

If 20% of the data set would result in a non-integer number of bid/ask midpoint prices, the number of bid/ask

midpoint prices to be removed from the set will be rounded down. For example, if the number of bid/ask midpoint

prices collected during the last 10 seconds prior to the close of trading was 31, 20% of the data set would be 6.2

bid/ask midpoint prices. As 6.2 is a non-integer number, the value will be rounded down, and the 6 highest and 6

lowest bid/ask midpoint prices will be removed from the data set.

4 All Touch Bracket Contracts listed and cleared by the Exchange make use of the Indicative Index to determine the

Expiration Value of the contract. Specifically, these include the BTC, ETH, EUR/USD, GBP/USD, USD/CHF, USD/JP

AUD/USD, USD/CAD, EUR/GBP, AUD/JPY, GBP/JPY, EUR/JPY, Wall Street 30, US 500, US Tech 100, US SmallCap 2000,

Gold, Silver, Crude Oil, and Natural Gas Touch Bracket Contracts.

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past the precision of the Underlying market. In the event the time it takes to collect at least

twenty-five (25) Underlying bids/ask midpoint prices exceeds the sixty (60) second period, t

Index Value will be calculated by taking the last twenty-five (25) Underlying bids/ask midpoi

prices just prior to the Calculation Time, removing the highest five (5) Underlying bids/a

midpoint prices and the lowest five (5) Underlying bids/ask midpoint prices, and using t

remaining fifteen (15) Underlying bids/ask midpoint prices to calculate the relevant Index Valu

The calculation used is a simple average of all fifteen (15) Underlying bids/ask midpoint price

rounded to one decimal point past the precision of the Underlying market. The Exchange uses

this calculation method as a means of preventing manipulation in the Underlying market to

influence the Exchange Expiration Value. In particular, the Exchange Calculation Meth

prevents a single bid/ask midpoint in the Underlying market from “knocking-out” a Touch

Bracket by virtue of trading a price level design to touch the Floor or the Ceiling. The Exchange

uses this calculation method as a means of preventing manipulation in the Underlying market to

influence the Exchange Expiration valu

IDCF is part of the Intercontinental Exchange group of entities. In 2018 IDCF partnered with

Blockstream Corporation, Inc., a leading provider of blockchain technologies, distributed

systems, and crypto-financial infrastructure, to launch the ICE Crypto Data. The ICE Crypto Da

is an aggregation of comprehensive multi-asset data from the most widely and actively traded

cryptocurrencies from leading trading venues, markets, and exchanges, compiled by

Blockstream and distributed by IDCF. The ICE Crypto Data currently includes data from

thirty-one (31) trading venues, with nine (9) venues contributing data pertaining to AVAX

cryptocurrency commodity.

The LDF is maintained by Lukka, Inc., using the principles set forth in the IOSCO Principles for

Financial Benchmarking (the “IOSCO Principles”). The LDF is disseminated to major market data

vendors on a one-second frequency. Lukka was founded in 2014 and is a global company

headquartered in the U.S. that provides institutional data to traditional and cryptocurrency

exchanges and trading desks, CPA and accounting firms, fund and financial auditors, 

administrators, miners, protocols, individuals, and any other businesses interacting with

cryptocurrencies.

The constituent Exchange venues for the LDF maintain fair and transparent market conditions to

impede illegal, unfair or manipulative trading practices, not place undue barriers to entry and

comply with applicable law and regulation including, capital markets regulations, money

transmission regulations, and client money custody requirements. Additionally, Lukka ensures

that constituent exchange venues deliver transparent and consistent trade data via an API with

sufficient reliability, detail, and timeliness. Moreover, the constituent exchange venues m

agree to cooperate with inquiries and investigations of the administrator and execute data

sharing agreements with the Exchange.

The Exchange can customize the data it receives from the ICE Crypto Data feed, as well as the

LDF, by selecting any number of the contributing venues. Of the contributing venues, the

Exchange has selected specific venues from which IDCF and LDF will provide data to be used 

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the calculation of the Indicative Index for the AVAX Crypto Contract (the “Underlying Trading

Venues”), and ultimately the AVAX Crypto Contracts’ Expiration Value.

The Exchange makes its selection of venues based on several factors, including CoinGecko’s

Trust Score rating, the Underlying Trading Venues’ daily spot volume ranking, AML and KYC

policies implementation, regulatory requirements, and the venue’s location in order to provide

global coverage.

6 The Exchange will monitor CoinGecko’s Trust Score ratings and may add to or

remove venues from its data consumption based on these scores. CoinGecko’s rating of the

venues the Exchange has selected are located here. The ICE Crypto Data and the LDF includes a

number of data points to aid in the monitoring of the relevant crypto markets such as price

discovery, historic data and full-depth market by price and venue, and a 24-hour market

overview. The Exchange will periodically review the Underlying Trading Venues it has selected

to determine the venues’ continued appropriateness for inclusion in the Indicative Index and

may add or remove trading venues as appropriate.

The Exchange Crypto Contracts are fully regulated and benefit the public interest both as

hedging tool and as speculative trading instruments. Like all the Exchange Contracts, the AVAX

Crypto Contracts will be fully collateralized at the time the transaction is entered. Additionally,

the Ceiling and Floor function as a guaranteed stop. Thus, the trader is aware of the maximum

risk to enter the transaction and the risk is limited by virtue of the predetermined Ceiling and

Floor prices. Moreover, unlike the Underlying markets, the AVAX Crypto Contracts trade on a 1:1

ratio, thereby increasing the trader’s potential reward as compared to investing the same dollar

amount in the Underlying asset itself. However, the advantage of trading a Touch Bracket

Contract is the built-in guaranteed stops (the Ceiling and the Floor) to protect the trader from

losing more than his known maximum risk. Additionally, the trader may choose to exit his

position as the market moves toward the range limits to either take profits or minimize losse

The Underlying cryptocurrency commodity markets are traded 24 hours per day, 7 days per

week. The Exchange has selected the specific Underlying Trading Venues from which to obta

prices to include in the calculation of the Indicative Index Value that operate from different

regions globally, in order to mitigate against the possibility of less activity in the Underlying

markets at any given time due to the time of day. The Exchange will have at least three

dedicated Market Maker liquidity providers who will quote a two-sided market pursuant to the

terms of the Market Maker Agreement and subject to the rules of the Exchange. Non-Market

Maker Trading Members will have a Position Limit of 250 Contracts. In order to provide

sufficient liquidity, Market Makers will be subject to Alternative Position Limits of one-thous

times the standard 250 lot limit, which shall apply on a per strike basis rather to the entire Class

6 CoinGecko has been in operation since 2014 and is a website and mobile app that provides live crypto prices, crypto

education, and aggregates information regarding the performance of various cryptocurrencies for analysis purposes.

CoinGecko launched its Trust Score rating in May 2019 in order to combat fake trading volume among cryptocurrency

exchanges. In determining a rating, CoinGecko considers the crypto exchange’s liquidity/web traffic quality, scale

operations, API technical coverage, cybersecurity, team presence (transparency into management team), and past

negative incidents (such as regulatory issues, hack incidents, account disputes, etc.). Further explanation as to

CoinGecko’s Trust Score rating methodology can be found here. CoinGecko indicates that it is constantly revising,

improving and upgrading factors for consideration in its ratings determination, and plans to include trade history

analysis, API quality analysis, hot and cold wallet analysis, social media analysis, exchange support turnover time,

user reviews, and licensing and regulations analysis in the future.

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of Contracts. Market Makers will also be relieved of their quoting obligations once they have

acquired a position of 500 Contracts but will be required to resume their obligations once their

position has fallen below 500 Contracts.

Regular trading in the AVAX Crypto Contracts will begin at 11:00 pm ET on Friday evening, and

expire at 4:15 pm ET on Friday afternoon, unless knocked-out prior to the stated Expiration time.

DCM CORE PRINCIPLES

The Exchange has identified the following Designated Contract Market (“DCM”) Core Principl

as potentially being impacted by the addition of the AVAX Crypto Contracts: Core Principle 2

Compliance with Rules; Core Principle 3 Contracts Not Readily Subject to Manipulation; Core

Principle 4 Prevention of Market Disruption; Core Principle 5 Position Limits or Position

Accountability; Core Principle 7 Availability of General Information; Core Principle 8 Daily

Publication of Trading Information; Core Principle 9 Execution of Transactions; Core Principle 10

Trade Information; Core Principle 11 Financial Integrity of Transactions; Core Principle 12

Protection of Markets and Market Participants; and Core Principle 18 Recordkeeping.

Core Principle 2 Compliance with Rules

Core Principle 2 requires the DCM to have the capacity to detect, investigate, and apply

appropriate sanctions to any person that violates any rule of the contract market. The Exchange

has a dedicated Compliance/Regulatory staff that monitors the markets, investigates potential

rule violations, and imposes sanctions against individuals who have been determined to have

violated the Rules. The Exchange has an automated trade surveillance system, Scila, which is

capable of detecting potential trade practice violations, and also conducts real-time market

monitoring of all trading activity in all Contracts, at all hours the Exchange is open. The

Exchange is able to set the parameters by which the system detects potential issues. Chapter 9

of the Exchange Rulebook sets forth the Exchange’s authority to investigate and sanction

Members for activity that violates the Exchange Rules. The Exchange Rule 2.10 grants the

Exchange jurisdiction over any Person initiating or executing a transaction on or subject to the

Rules of the Exchange, either directly or through an intermediary, and any Person for whose

benefit such transaction has been initiated or executed. The Exchange’s jurisdiction continu

notwithstanding the termination of the Person’s Exchange Membership. The Exchange Rule 3.3

requires all Trading Members and Authorized Traders to comply with the Exchange Rules and to

cooperate with the Exchange promptly and fully in any investigation, call for information, inquiry,

audit, examination or proceeding. Such cooperation may involve a request for the Member’s or

Authorized Trader’s activity in the relevant Underlying market. Accordingly, the listing of the

AVAX Crypto Contracts will not negatively impact the Exchange’s ability to comply with this Core

Principle.

In addition, the Exchange is a member of the Intermarket Surveillance Group (“ISG”). The ISG is

an international group of exchanges, market centers, and market regulators that perform market

surveillance in their respective jurisdictions. The ISG provides a framework for the sharing of

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information and the coordination of regulatory efforts among exchanges trading securities and

related products to address potential intermarket manipulations and trading abuses. The ISG

was developed specifically to detect, prevent, and, when necessary, support enforceme

proceedings related to potential fraud and manipulation across members' markets. To that end,

each member of the ISG has agreed to the exchange of information, upon request from another

ISG member, relating to transactions in any Financial Instruments, that relate to possible fraud

and manipulation. Therefore, for this limited purpose, each ISG member “shall provide any

information or documents...” requested by another ISG member. ISG membership also requires

each and every ISG member, including other CFTC-regulated entities, provide any requested

documents that they could obtain for their own reviews for fraud or manipulation, including any

documentation from spot cryptocurrency markets obtainable by other ISG members in the

ordinary course of business. Thus, the Exchange believes its ISG membership gives it access to

a broad swath of data from underlying spot cryptocurrency markets through other ISG members

who have the direct ability to request such data from spot markets for the limited purpose of

detecting and preventing fraud and manipulation. The Exchange has also obtained information

sharing agreements with certain spot cryptocurrency markets.

The Exchange certifies that its surveillance program together with its participation in a k

industry group for information sharing and regulatory coordination addresses the requirements

of Core Principle 2.

Core Principle 3 Contracts Not Readily Susceptible to Manipulation and Core Principle 4

Prevention of Market Disruption

Core Principles 3 and 4 require the DCM to list only contracts that are not readily susceptible to

manipulation and to prevent market disruption. The Exchange has selected the Underlying

cryptocurrency commodity markets upon which to base its AVAX Crypto Contracts in large part

due to their active markets in terms of volume and liquidity, and their popularity among

consumers, institutional investors, and other financial professionals. Moreover, the Exchan

Calculation Method significantly reduces the potential for manipulation of the Exchan

Indicative Index by removing a percentage of the upper and lower Underlying bid/ask midpoint

prices from the data set of ICE Crypto Data leading up to Expiration of the Exchange Contracts,

with the remaining prices averaged. The ICE Crypto Data consists of numerous data points

from numerous trading venues, which can be customized by the Exchange. Accordingly, an

individual trading the AVAX Crypto Contracts would not have knowledge of the specific tradi

venue(s) from which the final set of ICE Crypto Data will be used to calculate the Expirati

Value, further preventing the potential for manipulation of the AVAX Crypto Contracts’

settlement by trading in the Underlying markets.

The AVAX Crypto Contracts will have a position limit of 250 lots for non-market maker Members,

which in combination with the composition of the ICE Crypto Data and the Exchange Calculation

Method would make a manipulation attempt essentially cost-prohibitive.

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The Exchange Calculation Method (described above), which comprises the Exchange Indicative

Index (described above), is calculated on a second-by-second basis and works in conjunction

with the previous components to further mitigate any risk of potential manipulation of the

Underlying market for a positive result in the Underlying market. The Exchange Calculation

Method for the cryptocurrency commodity is constructed to use bid/ask midpoint prices on the

constituent exchanges. Using the Exchange’s method, all bid/ask midpoint prices occurring in

the Underlying market as reported in the ICE Cryptocurrency Data within a 60-second window.

The highest 20% and lowest 20% of bid/ask midpoint prices are removed from the data set, and

the remaining data set is averaged, resulting in the Indicative Index Value and likewise,

Expiration Value. In the event 25 bid/ask midpoint prices are not available within any particular

60 second window, the window may be extended until 25 prices are collected (again outliers are

removed and the remaining data set averaged). Analysis of historical market data indicates the

event of this occurring would be rare. Under the Exchange Calculation Method, even if a

participant was able to absorb all liquidity across multiple exchanges to create off-market

bid/ask midpoint prices, those prices would undoubtedly fall into the high/low 20% of the

calculation and be discarded from the Indicative Index and Expiration Value calculation, thereby

negating any nefarious activity in which a participant may have engaged.

The Exchange has dedicated staff to survey the market and uses the Scila surveillance system

to assist with market monitoring at all times the Crypto Contracts will be listed. Additionally, the

Exchange will monitor the ICE Crypto Data feed for anomalies and disproportionate moves in

the prices making up the Expiration Value. The Exchange will be able to obtain information from

the ICE Crypto Data to assist in the Exchange’s market surveillance, such as, any relevant AVAX

trade price, bid and ask prices, activity date and time, venue at which any relevant bid/ask

occurred, size, volume, daily high and low, and a number of other data points. IDCF and LDF

have agreed that upon the Exchange’s request arising as the result of a regulatory investigation

or related market data inquiry, it will share with the Exchange additional information that may be

provided by Blockstream, to the extent that it is reasonably practicable, and does not violate

applicable laws, regulations and/or any of IDCF’s, or LDF’s, contractual obligations.

The Exchange trading system has a cap-check feature that ensures a trader has sufficient fu

in their account to fully collateralize their Order if executed before the Order is accepted by the

Exchange. The Exchange also has the ability to block new Orders and/or cancel working Orders

if necessary to prevent market disruption.

Therefore, the Exchange has determined that the AVAX Crypto Contracts will not be readily

susceptible to manipulation and the protections the Exchange has in place will minimize

disruption in the AVAX Crypto Contract market.

Core Principle 5 Position Limits

Core Principle 5 requires the DCM set position limits or position accountability to reduce the

potential threat of market manipulation or congestion. The Exchange has set the initial position

limit for Trading Members at 250 Contracts, thereby reducing the motivation for an individual to

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manipulate the Underlying market in order to affect the Exchange settlement, explained in detail

above. Contracted Market Makers will not be subject to the 250 Contract position limit in order

to provide sufficient liquidity to the market. Market Makers will instead be subject to

Alternative Position Limit of 400 times the 250 lot limit (thus, 250,000) for non-Market Maker

Trading Members. Additionally, such Alternative Position Limits shall apply not to the entire

Class of Touch Bracket Contracts, but to each Touch Bracket Contract in that Class (i.e., per

strike). A Market Maker taking advantage of the Alternative Position Limits must, within 1

business day following a request by the Exchange’s Compliance Department, provide the

Exchange Compliance Department with a trade register detailing all trading activity in any

account owned or controlled by the Market Maker in the relevant Underlying market during the

15 minutes immediately before and after any Expiration time identified by the Exchange

Compliance Department in the request.

Core Principle 7 Availability of General Information and Core Principle 8 Daily Publication of

Information

Core Principles 7 and 8 require the DCM to make available to the public accurate information

regarding the contract terms and conditions, as well as daily information on contracts such as

expiration value, settlement payout, volume, open interest, and opening and closing ranges. The

Exchange makes available on its website the Exchange Rulebook, which will include the contract

specifications for the AVAX Crypto Contracts. In addition to the Rulebook, contra

specifications will be detailed on the Exchange website itself. The Exchange publishes its Dai

Bulletin which contains the preceding contract and transaction information on the website’s

“Market Data” page. Also published on the Market Data page are Time and Sales, which are

updated every 15 minutes, and Results which reports the Expiration Value and Settlement Value

for all the Exchange Contracts settled throughout the day. Therefore, the listing of the AVAX

Crypto Contracts will not negatively impact the Exchange’s ability to comply with these Core

Principles.

Core Principle 9 Execution of Transactions

Core Principle 9 requires the DCM to provide a competitive, open, and efficient market 

mechanism for executing transactions that protects the price discovery process. The Exchange

has [three] dedicated Market Makers that have committed to pricing a two-sided market.

Market participants are able to view the orderbook up to five layers deep (depending on t

market activity at any particular time) on the platform. The Exchange displays the Time and

Sales of all Contracts traded on the Exchange on the Exchange website which is updated every

15 minutes. Therefore, the addition of the AVAX Crypto Contracts will not negatively impact the

Exchange’s ability to comply with this Core Principle.

Core Principle 10 Trade Information

Core Principle 10 requires the DCM to maintain rules and procedures to provide for the

recording and safe storage of all identifying trade information in a manger that enables the

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contract market to use the information to assist in the prevention of customer and market

abuses and to evidence any violations of the Exchange Rules. The Exchange maintains an

electronic audit trail as required by the Commission Regulations which enables the Exchange to

review all activity on the Exchange.

Core Principle 11 Financial Integrity of Transactions

Core Principle 11 requires the DCM to establish and enforce rules and procedures for ensuring

the financial integrity of transactions entered on the contract market. As with all Contrac

offered on the Exchange, the AVAX Crypto Contracts will be fully collateralized and Members

entering a transaction will have knowledge of their maximum risk prior to executing a

transaction. All transactions will be cleared by the Exchange DCO.

Core Principle 12 Protection of Markets and Market Participants

Core Principle 12 requires a DCM to protect markets and market participants from abusive

practices committed by any party and to promote fair and equitable trading on the contract

market. Chapter 5 of the Exchange Rulebook establishes Rules to protect the market and

market participants from abusive, disruptive, fraudulent, noncompetitive, and unfair conduct and

trade practices. The Rules apply to all market participants and transactions on the Exchange,

and participants will need to comply with the Rules when trading the new AVAX Crypto

Contracts.

Core Principle 18 Recordkeeping

Finally, Core Principle 18 requires a DCM to maintain records in accordance with part 45, Swap

Data Recordkeeping and Reporting Requirements. In early 2013, the Exchange and CFTC staff

engaged in discussions regarding the classification of its Event Contracts and Variable Payo

Contracts following the Dodd-Frank amendments to the Act. The review resulted in the

determination that the Exchange Event Contracts and Variable Payout Contracts were deemed

to be “swaps” under Section 1a(47) of the Act. On June 30, 2017, the Exchange was granted

relief in CFTC Letter No. 17-31 (the “Letter”) from Commission Regulations 38.8(b), 38.10,

38.951 (in part), 39.20(b)(2) and Parts 43 and 45. Pursuant to the Letter, the Exchange is not

required to report its Variable Payout Contracts, which include Touch Bracket Contracts, to a

swap data repository. The Exchange will continue to meet the requirements for which it has not

been granted relief, as well as the conditional requirements set forth in the Letter. Accordingly,

the addition of the AVAX Crypto Contracts will not negatively impact the Exchange’s ability to

comply with this Core Principle.

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DCO CORE PRINCIPLES

The Exchange has identified the following Derivatives Clearing Organization (“DCO”) Co

Principles as potentially being impacted by the addition of the AVAX Crypto Contracts: Core

Principle C Participant and Product Eligibility; Core Principle D Risk Management; Core Principle

E Settlement Procedures; Core Principle G Default Rules and Procedures; Core Principle L Public

Information.

Core Principle C Participant and Product Eligibility

Core Principle C requires the DCO to establish appropriate standards for determining the

eligibility of transactions submitted to it for clearing. The Exchange has found that transactions

in the fully-collateralized AVAX Crypto Contracts are eligible for clearing and not readily

susceptible to manipulation. The AVAX Crypto Contracts will be based on the relevant

Underlying cryptocurrency commodity values, the two most popular cryptocurrencies among

crypto traders. The ICE Crypto Data is comprised of various order and trade information from

numerous trading venues, and may opt for additional venues in the future, thereby reducing the

potential for manipulative trading activity in order to impact the Expiration Value and Contract

settlement. The Exchange has at least [three] designated Market Makers dedicated to making a

two-sided market to provide sufficient liquidity in the new AVAX Crypto Contracts. Additional

the Exchange is operationally able to accept the transactions for clearing. Finally, all trading in

the AVAX Crypto Contracts, like all the Exchange products, will be conducted on a

fully-collateralized basis, thereby mitigating any credit risk of a particular Member to the

Exchange or other market participant. The Exchange has therefore determined that these

Contracts are appropriate to accept for clearing.

Core Principle D Risk Management

Core Principle D requires the DCO to ensure it possesses the ability to manage the risks

associated with discharging its responsibilities through the use of appropriate tools and

procedures. Pursuant to the Exchange’s DCO Orders of Designation, all Contracts cleared

through the Exchange are fully-collateralized. No Contracts are traded on margin, thereby

minimizing the Exchange’s risk if a Member becomes insolvent. Likewise, the Exchange

Members face no credit risk from the Exchange because the Exchange’s obligation to those

Members is limited to the amounts those Members deposit with the Exchange for trading

purposes, and those funds are kept in a segregated Member Property account at the settlement

bank and may not be used to satisfy the obligations of the Exchange.

Core Principle E Settlement Procedures

Core Principle E requires the DCO to complete money settlements on a timely basis but not less

frequently than once each day, employ an arrangement to eliminate or limit exposure to

settlement bank risks, ensure that money settlement is final when effected, and maintain 

accurate record of the flow of funds. Like all the Exchange Contracts, the new AVAX Cryp

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Contracts will be settled intraday within minutes of the Contract’s Expiration. Also, like all the

Exchange Contracts, the AVAX Crypto Contracts will be fully collateralized, thereby limiting the

Exchange’s financial exposure. The Exchange Rule 6.3, Settling Contracts at Expiration, requir

any Person who believes there has been an error in settlement to report the potential error to the

Exchange immediately, and in any event within 24 hours of the settlement. The Rule states that

if the Exchange does not receive notice of a potential error in settlement within 24 hours of the

settlement (excluding non-Trading Days), then settlement will be final. The Exchange tracks t

flow of funds throughout the entirety of the transaction, from the submission of an ord

through settlement. The Exchange does not have netting or offset arrangements with any other

clearing organization, and no Contracts are physically settled. Accordingly, the Exchange’s

current practices will continue to comply with this Core Principle following the addition of the

AVAX Crypto Contracts.

Core Principle G Default Rules and Procedures

Core Principle G requires the DCO to have rules and procedures designed to allow for the

efficient, fair, and safe management of events during which Members become insolvent

otherwise default on the obligations to other Members or the DCO. The Exchange does not

allow Members to trade if their transactions are not fully collateralized. The Exchange

cap-check system will check the Member’s account when an Order is placed, and if the account

lacks sufficient funds to collateralize the trade, the Order is not accepted by the Exchange. 

to this system check, Members cannot default on their obligations to the Exchange as it relates

to trade collateralization. As a backup provision, the Exchange also has the authority under the

Exchange Rules 5.3 and 5.4 to cancel any Orders if the Member account lacks sufficient fu

to fully collateralize the trade. The Exchange Rule 3.3(d) requires each Member to immediately

notify the Exchange in writing upon becoming aware that he/she/it becomes the subject of a

bankruptcy petition, receivership proceeding, or the equivalent, or being unable to meet any

financial obligation as it becomes due. The Exchange may also sanction Members under Ru

5.19 for failure to retain sufficient collateral in his/her/its account to meet his/her/its fina

obligations. These system checks and applicable Rules will continue to apply following the

addition of the AVAX Crypto Contracts.

Core Principle L Public Information

Core Principle L requires the DCO to make available to the public the terms and conditions of

each contract, as well as the daily settlement prices, volume, and open interest of the contract.

As stated previously, the Rulebook is made available to the public on the Exchange website.

Expiration and Settlement Values for the AVAX Crypto Contracts will be listed on the Exchange

website on the Market Data page under the Results tab, as well as the Daily Bulletin which also

shows volume and open interest. Therefore, the addition of the AVAX Crypto Contracts will not

negatively impact the Exchange’s ability to comply with this Core Principle.

* * * * *

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In accordance with §40.2(a)(2) of the Commission’s Regulations, the Exchange plans to begin

listing the AVAX Crypto Contracts for the start of business on or after the trade date November

20, 2023.

A complete index of the DCM and DCO Core Principles that indicates whether the Core Principle

is applicable and addressed in the text of this submission is attached in Exhibit A. The contract

specifications as they will appear in the Rulebook are set forth in Exhibit 

The Exchange hereby certifies that the additions contained herein comply with the Act, 

amended, and the Commission Regulations adopted thereunder. No substantive opposing

views were expressed to the Exchange with respect to any of these actions.

The Exchange hereby certifies that a copy of these additions was posted on its website at t

time of this filin

Should you have any questions regarding the above, please do not hesitate to contact me by

telephone at (312) 884-0161 or by email at Kevin.Dan@nadex.com.

Sincerely,

/s/

Kevin Dan

Chief Compliance Offi

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EXHIBIT A

Designated Contract Market (“DCM”) Core Principles

Core Principle

Number

Core Principle Name Addressed in or Not

Applicable to

Self-Certificati

1 Designation as Contract Market Not applicable (designation

granted)

2 Compliance with Rules Addressed

3 Contracts Not Readily Subject to

Manipulation

Addressed

4 Prevention of Market Disruption Addressed

5 Position Limitations or Accountability Addressed

6 Emergency Authority Not applicable (the Exchange

Rulebook, 2.4 Emergency

Rules)

7 Availability of General Information Addressed

8 Daily Publication of Trading Information Addressed

9 Execution of Transactions Addressed

10 Trade Information Addressed

11 Financial Integrity of Transactions Addressed

12 Protection of Markets and Market

Participants

Addressed

13 Disciplinary Procedures Not applicable (the Exchange

Rulebook, Chapter 9 Rule

Enforcement)

14 Dispute Resolution Not applicable (the Exchange

Rulebook, 10.2 – 10.4

Arbitration)

15 Governance Fitness Standards Not applicable (the Exchange

Rulebook, 2.2 Service

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Restrictions, 11.2 Service and

Disciplinary History)

16 Conflicts of Interest Not applicable (the Exchan

Rulebook, 2.6 Voting, 2.9

Trading Limitations, 11.1

Non-Public Information, 11.3

Voting)

17 Composition of Governing Boards of

Contract Markets

Not applicable (internal

review and appointment of

directors)

18 Recordkeeping Addressed

19 Antitrust Considerations Not applicable

20 System Safeguards Not applicable (internal

controls and policies in

place)

21 Financial Resources Not applicable (capital

requirements and quarterly

reporting compliant)

22 Diversity of Boards of Directors Not applicable (not public

company, internal review and

appointment of directors)

23 Securities and Exchange Commission Not applicable

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Derivatives Clearing Organization (“DCO”) Core Principles

Core Principle

Number

Core Principle Name Addressed in or Not

Applicable to

Self-Certificati

A Compliance Not applicable

B Financial Resources Not applicable (capital

requirement and quarterly

reporting compliant)

C Participant and Product Eligibility Addressed

D Risk Management Addressed

E Settlement Procedures Addressed

F Treatment of Funds Not applicable (the Exchange

Rulebook Chapter 8 Member

Funds)

G Default Rules and Procedures Addressed

H Rule Enforcement Not applicable (the Exchange

Rulebook, Chapter 9 Rule

Enforcement, 10.2 – 10.4

Arbitration)

I System Safeguards Not applicable (internal

controls and policies in

place)

J Reporting Not applicable

K Recordkeeping Not applicable (the Exchange

maintains all required

records for at least 5 years)

L Public Information Addressed

M Information Sharing Not applicable (member of

Joint Audit Committee, Joint

Compliance Committee,

Intermarket Surveillance

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Group, and signatory to the

International Information

Sharing Memorandum of

Understanding and

Agreement)

N Antitrust Considerations Not applicable

O Governance Fitness Standards Not applicable (the Exchange

Rulebook, 2.2 Service

Restrictions, 11.2 Service and

Disciplinary History, internal

review and appointment of

directors)

P Conflicts of Interest Not applicable (the Exchan

Rulebook, 2.6 Voting, 2.9

Trading Limitations, 11.1

Non-Public Information, 11.3

Voting)

Q Composition of Governing Boards Not applicable (internal

review and appointment of

directors)

R Legal Risk Not applicable (the Exchange

Rulebook Chapter 6)

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EXHIBIT B

The Contract Specifications set forth below will appear in the Rulebook as 13.

13.03 AVALANCHE (AVAX) CRYPTOCURRENCY “TOUCH BRACKET” VARIABLE PAYOUT

CONTRACTS

(a) SCOPE – These Rules shall apply to the Class of Contracts referred to as the AVALANCHE

(AVAX) Cryptocurrency “Touch Bracket” Variable Payout Contracts, referred to as a ‘Touch

Bracket”, issued by the Exchange.

(b) UNDERLYING – The Underlying for this Class of Contracts is the spot AVAX cryptocurrency

commodity bid/ask midpoint prices as reported in the LDF and the ICE

® Cryptocurrency Data

aggregated by Blockstream® Corporation and distributed by ICE Data

® Connectivity and Feeds,

Inc., herein referred to as “U-AVAX”, quoted in US dollars.

(c) SOURCE AGENCY – The Source Agency is the Exchange.

(d) TYPE – The Type of Contract is a Variable Payout Contract.

(e) PAYOUT CRITERION – The Payout Criterion for each Contract will be set by the Exchange at

the time the Variable Payout Contracts are initially issued. For the AVAX Touch Brackets, the

Payout Criteria for the Contracts as forth below or as updated on the Exchange’s Trading

System:

(i) WEEKLY AVAX TOUCH BRACKET VARIABLE PAYOUT CONTRACTS, Expiration is the

earlier of (a) 4:15PM ET on the Last Trade Day of the contract listing, or (b) when the

AVAX Index Value is equal to or greater than the Ceiling, or equal to or less than the

Floor. the Exchange shall list a set of four (4) Touch Bracket Variable Payout Contracts,

each referred to as a ‘Touch Bracket’, that open at 11:00 PM ET on the first Trade Day 

the week, with overlapping ranges, which conform to the Payout Criteria listed below.

CONTRACT 1: The Ceiling shall be X + 0.4; The Floor shall be X –0.1.

CONTRACT 2: The Ceiling shall be X + 0.3; The Floor shall be X – 0.2.

CONTRACT 3: The Ceiling shall be X + 0.2; The Floor shall be X – 0.3.

CONTRACT 4: The Ceiling shall be X + 0.1; The Floor shall be X – 0.4.

DOLLAR MULTIPLIER – The Dollar Multiplier shall be 1.

In each case, “X” equals the last U-AVAX value, as reported by the Source Agency,

rounded to the nearest 1.

(ii) Upon the early Expiration of a Touch Bracket, the Exchange may list a new Touch

Bracket with a Ceiling of X +0.4 (or 0.1)) and a Floor of X- 0.1 (or 0.4) where X equals the

Ceiling (or Floor) of the Touch Bracket that expired early. The newly listed Touch Bracket

will have the same Last Trade Day as originally established for the expired Touch Bracket

and the same Dollar Multiplier as the expired Touch Bracket.

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(f) MINIMUM TICK –The Minimum Tick size for the AVAX Touch Bracket Variable Payout

Contracts shall be 0.005 and the Tick Value shall be 1.00.

(g) POSITION LIMIT –The Position Limit for the AVAX Touch Bracket Variable Payout Contracts

shall be 250 Contracts, or as updated on the Exchange’s website or Trading System.

(h) MARKET MAKER ALTERNATIVE POSITION LIMIT – The Position Limit for the AVAX Touch

Bracket Variable Payout Contracts for contracted Market Makers shall be 250,000 Contracts per

strike level, or as updated on the Exchange’s website or Trading System.

(i) LAST TRADING DATE – The Last Trading Date in a Series is the same date as the Settlement

Date.

(j) SETTLEMENT DATE – The Settlement Date of the Contract shall be the same date as the

Expiration Date.

(k) EXPIRATION DATE – The Expiration Date of the Contract shall be the date on which the AVAX

Touch Bracket Expiration Value is released by the Source Agency.

(l) SETTLEMENT VALUE – The Settlement Value is the amount paid to the holder of either a

Short or Long Variable Payout Contract on Settlement Date. The Settlement Value of a Variable

Payout Contract is determined as described in the definition for Long and Short Variable Payo

Contracts.

(m) AVAX INDEX VALUE – The Source Agency shall calculate and produce an AVAX Index Value

once each second throughout the life of the AVAX Touch Bracket Contracts. That is, each

second the Source Agency will calculate a AVAX Index Value by taking by taking all U-AVAX

bid/ask midpoint prices occurring in the sixty (60) seconds leading up to the Calculation Time,

provided at least twenty-five (25) bid/ask midpoint prices are captured during the sixty (6

second period, removing the highest twenty (20) percent of U-AVAX bid/ask midpoint prices and

the lowest twenty (20) percent of U-AVAX bid/ask midpoint prices from the data set

7

, and using

the remaining U-AVAX bid/ask midpoint prices to calculate the AVAX Index Value for that

second. The calculation used is a simple average of the remaining U-AVAX bid/ask midpoint

prices in the data set, rounded to one decimal point past the precision of the Underlying market.

In the event the time it takes to collect at least twenty-five (25) U-AVAX bid/ask midpoint pric

exceeds the sixty (60) second period, the AVAX Index Value will be calculated by the Source

Agency by taking the last twenty-five (25) U-AVAX bid/ask midpoint prices just prior to t

Calculation Time, removing the highest five (5) U-AVAX bid/ask midpoint prices and the lowe

five (5) U-AVAX bid/ask midpoint prices, and using the remaining fifteen (15) U-AVAX bid

midpoint prices to calculate the AVAX Index Value. The calculation used is a simple average of

all fifteen (15) IU-AVAX bid/ask midpoint prices, rounded to one decimal point past the precisi

of the Underlying market.

7

If 20% of the data set would result in a non-integer number of bid/ask midpoint prices, the number of bid/ask

midpoint prices to be removed from the set will be rounded down. For example, if the number of bid/ask midpoint

prices collected during the last 10 seconds prior to the close of trading was 31, 20% of the data set would be 6.2

bid/ask midpoint prices prices. As 6.2 is a non-integer number, the value will be rounded down, and the 6 highest and

6 lowest bid/ask midpoint prices will be removed from the data set.

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(n) EXPIRATION VALUE – The Expiration Value is the AVAX Index Value released by the Source

Agency at Expiration on the Expiration Date.

(o) CONTINGENCIES – If no level is actually announced on the Expiration Date due to a delay,

postponement or otherwise in such release announcement by the Source Agency, the

Settlement Date will be delayed until the Underlying number is released for that Series.

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