Crypto.com | Derivatives North America

200 West Jackson Blvd., Suite 1400

Chicago, IL 60606

October 27, 2023

Via CFTC Portal Submissions

Mr. Christopher Kirkpatrick

Secretary of the Commission

Office of the Secretariat

Commodity Futures Trading Commission

3 Lafayette Centre 

1155 21st Street, N.W. 

Washington D.C. 20581

RE: Self-Certification of Product: Bitcoin Cash (BCH) Cryptocurrency Event Contract -

Submission Pursuant to Commission Regulation §40.2(a)

Dear Mr. Kirkpatrick:

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

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

“Commission”) under the Act, North American Derivatives Exchange, Inc. d/b/a Crypto.com | 

Derivatives North America (the “Exchange” or “CDNA”) hereby self-certifies a swap, which is an 

event contract on Bitcoin Cash (BCH) cryptocurrency (the “BCH Crypto Event Contract”), which 

will be set forth in the Exchange Rules and will be launched by the Exchange on or after October 

31, 2023.

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

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, and BTC and ETH Event Contracts on April 10, 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 

740,000 contracts. Therefore, the Exchange continues to expand its cryptocurrency commodity 

derivative product offerings to meet public demand for diverse and regulated products.2 

The BCH Crypto Event Contract set forth in Rule 12.96 is nearly identical in nature to the BTC 

Event Contract that was self-certified by the Exchange on April 10, 2023, and the ETH Event 

Contract that was also self-certified by the Exchange on April 10, 2023. The BCH Crypto Event 

Contract includes Intraday, Hourly and Daily Cryptocurrency contracts on the cryptocurrency BCH 

and will be structured in the same way as the Exchange’s currently listed event contracts for 

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

Exchange Rulebook. 

2 We use the terms “cryptocurrency” and “digital asset” interchangeably in this filing.
Crypto.com | Derivatives North America

200 West Jackson Blvd., Suite 1400

Chicago, IL 60606

2

Forex.3 Nine strike levels will be generated for the BCH Crypto Event Contract. The Expiration 

Value for the BCH Crypto Event Contract will be the Index Value as specified in each Contracts’ 

individual specifications. Like all the Exchange Event contracts, the BCH Crypto Event Contract 

will have a settlement payout range from $10to $100, or a payout of $0. The BCH Crypto Event 

Contract will be listed at 8:00AM ET on the Start Date, or at the Expiration of the previously listed 

Event Contract (as described in the Specifications) and will cease trading pursuant to each 

Contracts’ individual specifications. The Exchange has at least three dedicated market makers 

who are committed to providing liquidity for the BCH Crypto Event Contract.

The Indicative Index for the BCH Crypto Event Contract 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 BCH 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 (60) 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 set5, 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 

3 Concurrent with Bitcoin and Ether, Litecoin has been expressly identified by the Commission as a “commodity” in 

various filings. See, e.g., 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, ETH, LTC [emph. added], and at least two fiat-backed stablecoins, tether (‘USDT’) and the Binance USD 

(‘BUSD’), as well as other virtual currencies as alleged herein, are ‘commodities,’ as defined under Section 1a(9) of the 

Act, 7 U.S.C. § 1a(9)”). See Also, 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 are distinct from ‘real’ or ‘fiat’ currencies, which are the coin and paper money of the United States or another 

country 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 Section 

1a(9) of the Act, 7 U.S.C. § 1a(9) (2018)”) (emph. added). Additionally, BCH was created by a “hard fork” from BTC, and 

therefore, BCH is tethered to, and maintains the characteristics of BTC, which the CFTC has identified as a “commodity,” 

as noted above. BCH has been in existence for over ten 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 CFTC, as well as the broad definition of commodity 

in Section 1a(9) of the Act. Moreover, BCH, in and of itself, has never been categorized as anything other than a 

commodity and no law or regulatory authority in the United States has indicated anything to the contrary.

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/JPY, 

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.

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.
Crypto.com | Derivatives North America

200 West Jackson Blvd., Suite 1400

Chicago, IL 60606

3

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, the 

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

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

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

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

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

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. 

The Exchange plans to list the BCH Crypto Contracts based on the Underlying BCH cryptocurrency 

commodity market and settle the BCH 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”)). 

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 Data 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 BCH 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, fund 

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 must 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 in 

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

Venues”), and ultimately the BCH Crypto Contracts’ Expiration Value. 
Crypto.com | Derivatives North America

200 West Jackson Blvd., Suite 1400

Chicago, IL 60606

4

The Exchange made 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 include 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 BCH Crypto Event Contract benefits the public interest both as a hedging tool and a trading 

instrument where market participants can take a market view on the price of the given 

commodity. Like all the Exchange Contracts, the BCH Crypto Event Contract will be fully 

collateralized at the time the transaction is entered. Thus, the trader is aware of the maximum 

risk to enter the transaction and the risk is limited by virtue of the pre-determined Strike Levels. 

The Underlying Bitcoin Cash market is traded 24 hours per day, 7 days per week. The Exchange 

has selected the specific Underlying Trading Venues from which to obtain 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. As noted above, the Exchange will have at least three dedicated Market Makers 

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 2,500 Contracts. In order to provide sufficient liquidity, Market Makers will be subject to 

Alternative Position Limits two times the standard 2,500 lot position limit, but which shall apply 

on a per strike basis rather to the entire Class 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.

Trading in the BCH Crypto Event Contract will begin at 11:00 pm ET Friday evening, and expire as 

indicated in the Specification. 

DCM Core Principles

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 of 

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. 
Crypto.com | Derivatives North America

200 West Jackson Blvd., Suite 1400

Chicago, IL 60606

5

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

as potentially being impacted by the launch of the BCH Crypto Event Contract: Core Principle 2 

(Compliance with Rules), Core Principle 3 (Contracts Not Readily Subject to Manipulation), Core 

Principle 4 (Prevention of Market Disruption), Core Principle 7 (Availability of General 

Information), Core Principle 8 (Daily Publication of Trading Information), 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. 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 continues notwithstanding the 

termination of the Person’s Exchange Membership. 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 New Event 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 

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 enforcement 

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 
Crypto.com | Derivatives North America

200 West Jackson Blvd., Suite 1400

Chicago, IL 60606

6

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 key 

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 (Contracts Not Readily Subject to Manipulation and Prevention of Market 

Disruption), implemented by Commission Regulations 38.200 and 38.250, require a DCM to list 

only contracts that are not readily susceptible to manipulation and to prevent market disruption. 

The Exchange has three of its existing Market Makers that have committed to providing liquidity 

in these contracts, which should limit opportunities for markets in the Event Contracts to be 

manipulated. As previously stated, the Exchange also uses the SCILA surveillance system to 

assist with market monitoring and has a staff dedicated to market surveillance to detect potential 

market manipulation. 

As to the BCH Crypto Event Contract, the Exchange has selected the Underlying cryptocurrency 

markets upon which to base its 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 Exchange Calculation Method significantly reduces the 

potential for manipulation of the relevant the Exchange Indicative Index by removing a percentage 

of the upper and lower Underlying prices from the data set of ICE Crypto Data leading up to 

Expiration of the BCH Crypto Event Contract, with the remaining prices averaged. ICE Crypto Data 

is comprised of numerous data points from numerous trading venues, which can be customized 

by the Exchange. Accordingly, an individual trading the BCH Crypto Event Contract would not 

have knowledge of the specific trading venue(s) from which the final set of ICE Crypto Data will 

be used to calculate the Expiration Value, further preventing the potential for manipulation of the 

BCH Crypto Event Contract’s settlement by trading in the Underlying markets. 

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

assist with market monitoring at all times the BCH Crypto Event Contract 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, the relevant cryptocurrency trade price, bid and ask prices, activity date and time, venue 

at which the trade occurred, size, volume, daily high and low, and a number of other data points. 

IDCF has 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.
Crypto.com | Derivatives North America

200 West Jackson Blvd., Suite 1400

Chicago, IL 60606

7

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

in the account to fully collateralize the 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.

Additionally, Regulation 38.256 requires a DCM to have the ability to comprehensively and 

accurately reconstruct all trading on its trading facility. The Exchange is currently able to 

reconstruct trading in its markets based on the data stored in the database, the SCILA 

surveillance system, as well as the Exchange log files. Trade data will continue to be stored in 

this same manner following the addition of the Event Contracts. Therefore, the addition of these 

contracts will not negatively impact the Exchange’s ability to comply with these Core Principles. 

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 2,500 Contracts, thereby reducing the motivation for an individual 

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

detail above. Contracted Market Makers will not be subject to the 2,500 Contract position limit in 

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

Alternative Position Limit of two times per strike level for non-Market Maker Trading Members 

(i.e. 5,000 Contracts per strike level). 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’s 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, implemented by Regulations 38.400, 38.401, 38.450, and 38.451, require 

a DCM to make available to the public accurate information regarding the contract terms and 

conditions, as well as daily information on contracts such as settlement price, volume, open 

interest, and opening and closing ranges. The Exchange makes the Exchange Rulebook available 

on its website, as well as the Daily Bulletin which contains the preceding required information. 

The Results page on the website also publishes the Expiration Value and Settlement Value for all 

the Exchange contracts settled during that week. Contract specifications for the New Event 

Contracts will likewise be set forth in the Rulebook and on the Exchange website. Settlement 

prices, volume, open interest, and opening and closing ranges for the BCH Crypto Event Contract 

will be included on the Daily Bulletin and posted on the Exchange website. Therefore, the addition 
Crypto.com | Derivatives North America

200 West Jackson Blvd., Suite 1400

Chicago, IL 60606

8

of the BCH Crypto Event Contract 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 and 

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

has two 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 the market 

activity at any particular time) on the platform. The Exchange displays the Time and Sales of all 

Contracts traded on the Exchange website which is updated every 15 minutes. Therefore, the 

addition of the BCH Crypto Event Contract 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 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 Contracts 

offered on the Exchange, the BCH Crypto Event 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 BCH Crypto Event Contract.

Core Principle 18 Recordkeeping

Finally, Core Principle 18, implemented by Regulation 38.951, requires a DCM to maintain records 

in accordance with part 45, Swap Data Recordkeeping and Reporting Requirements. In early 2013, 
Crypto.com | Derivatives North America

200 West Jackson Blvd., Suite 1400

Chicago, IL 60606

9

the Exchange and CFTC staff engaged in discussions regarding the classification of its Event 

Contracts and Variable Payout 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 with respect to its Event and 

spread contracts. The Event Contracts are Event options that will be covered by the relief letter, 

and therefore any trading activity in these contracts will not be reported 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. Therefore, the amendments 

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

DCO Core Principles

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

Principles as potentially being impacted by the addition of the Event Contracts: Core Principle C 

(Participant and Product Eligibility), Core Principle D (Risk Management), Core Principle E 

(Settlement Procedures), Core Principle G (Default Rules Procedures) Core Principle K 

(Recordkeeping), and Core Principle L (Public Information).

Core Principle C Participant and Product Eligibility

Core Principle C, implemented by Regulation 39.12, requires a DCO to determine the eligibility of 

contracts for clearing. The Exchange has determined the BCH Crypto Event Contracts will be 

eligible for clearing as trading in these event contracts will be on a fully-collateralized basis, as 

required by the Exchange’s Order of Designation, thereby mitigating any credit risk of a particular 

member to the Exchange or any other market participant. 

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, implemented by Regulation 39.14, includes in the definition of ‘settlement’, that 

is, “[a]ll payments due in final settlement of futures, options, and swaps on the final settlement 
Crypto.com | Derivatives North America

200 West Jackson Blvd., Suite 1400

Chicago, IL 60606

10

date with respect to such positions”. The Exchange’s BCH Crypto Event Contract will settle in a 

timely manner after the Expiration Value is published by the relevant federal government 

department. Also, in accordance with this Core Principle, the Exchange will continue to maintain 

an accurate record of the flow of funds associated with each settlement of the BCH Crypto Event 

Contract. Therefore, the additions discussed herein will not negatively impact the Exchange’s 

ability to comply with this Core Principle. 

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 or 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. Due 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 funds 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 Rule 5.19 for 

failure to retain sufficient collateral in his/her/its account to meet his/her/its financial 

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

addition of the BCH Crypto Event Contracts. 

Core Principle K Recordkeeping

Core Principle K, implemented by Regulation 39.20, requires a DCO that clears swaps and 

maintains swap data in accordance with the requirements of part 45. As indicated above, the 

Exchange has been granted relief from Commission Regulations 38.8(b), 38.10, 38.951 (in part), 

39.20(b)(2) and Parts 43 and 45 in CFTC Letter No. 17-31 with respect to its Event option and 

spread contracts. 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. 

Core Principle L Public Information

Core Principle L, implemented by Regulation 39.21, requires a 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 contains the contract 

specifications for all contracts listed on the Exchange and is made available to the public on the 

Exchange website. All settlement values are listed on the Exchange website on the ‘Results Page’, 
Crypto.com | Derivatives North America

200 West Jackson Blvd., Suite 1400

Chicago, IL 60606

11

as well as the Daily Bulletin which also shows volume and open interest. Therefore, the 

amendments discussed herein will not negatively impact the Exchange’s ability to comply with 

this Core Principle. 

* * * * *

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

listing the BCH Crypto Event Contracts for the start of business on or after the trade date October 

31, 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 B. 

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

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 the time of this filing.

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,

Kevin Dan

Chief Compliance Officer
Crypto.com | Derivatives North America

200 West Jackson Blvd., Suite 1400

Chicago, IL 60606

12

EXHIBIT A

Designated Contract Market (“DCM”) Core Principles

Core Principle 

Number

Core Principle Name Addressed in or Not 

Applicable to SelfCertification

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 
Crypto.com | Derivatives North America

200 West Jackson Blvd., Suite 1400

Chicago, IL 60606

13

Restrictions, 11.2 Service and 

Disciplinary History)

16 Conflicts of Interest Not applicable (the Exchange 

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
Crypto.com | Derivatives North America

200 West Jackson Blvd., Suite 1400

Chicago, IL 60606

14

Derivatives Clearing Organization (“DCO”) Core Principles

Core Principle 

Number

Core Principle Name Addressed in or Not 

Applicable to SelfCertification

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 

Group, and signatory to the 

International Information 
Crypto.com | Derivatives North America

200 West Jackson Blvd., Suite 1400

Chicago, IL 60606

15

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 Exchange 

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)
Crypto.com | Derivatives North America

200 West Jackson Blvd., Suite 1400

Chicago, IL 60606

16

EXHIBIT B

The Contract Specifications set forth below will appear in the Rulebook as 12.97. 

a. RULES 1.1 – 12.96 [UNCHANGED]

i.12.97 BITCOIN CASH (BCH) CRYPTOCURRENCY EVENT CONTRACTS

ii.(a) SCOPE – These Rules shall apply to the Class of Contracts referred to as the Bitcoin Cash 

Cryptocurrency (“Bitcoin Cash” or “BCH”) Event Contracts, referred to as an ‘Event Contract”, 

issued by the Exchange. 

iii.(b) UNDERLYING – The Underlying for this Class of Contracts is the spot Bitcoin Cash 

cryptocurrency commodity bid/ask midpoint prices reported by Lukka, Inc. and the ICE®

Cryptocurrency Data aggregated by Blockstream® Corporation and distributed by ICE Data®

Connectivity and Feeds, Inc., herein referred to as “U-BCH”, quoted in US dollars.

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

v.(d) TYPE – The Type of Contract is an Event Contract, which is a Swap.

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

the time the Event Contracts are initially issued. For the Bitcoin Cash Event Contracts, the Payout 

Criteria for the Contracts will be set as forth below or as updated on the Exchange’s Trading 

System: 

vii. (i) DAILY BITCOIN CASH EVENT CONTRACTS

viii. (1) EXPIRATION TIME – 5 PM Saturday thru Thursday; 4 PM Friday.

ix.

x.(2) STRIKE INTERVAL WIDTH – The interval width between each strike level shall 

be 2.0.

xi.

xii.(3) NUMBER OF STRIKE LEVELS LISTED – Nine (9) strike levels will be listed for 

each Daily Bitcoin Cash Event Contract Series.

xiii.

xiv.(4) STRIKE LEVELS GENERATED - Strike levels will be generated such that 

Event Contract “X” is valued ‘at-the-money’ in relation to the Underlying market as 

determined by the Source Agency, immediately before the issuance of these 

Contracts, and shall be measured in U.S. cents rounded to the nearest value ending 

in either 0.00, 0.0025, 0.0050, 0.0075 as reported by the Source Agency. Four (4) 

strike levels will be generated above Event Contract X at an interval of Y, and four 
Crypto.com | Derivatives North America

200 West Jackson Blvd., Suite 1400

Chicago, IL 60606

17

(4) strike levels will be generated below Event Contract X at an interval of Y (e.g. X 

– Y; X; X + Y). The Contract will have a Payout Criterion of greater than the strike 

level value.

xv.

xvi. (ii) INTRADAY BITCOIN CASH EVENT CONTRACTS

xvii.(1) EXPIRATION TIME – Hourly and every 20 minutes with the first expiration 

occurring at 8 PM, and the final expiration occurring at 5 PM ET CLOSE.

xviii.(2) STRIKE INTERVAL WIDTH – The interval width between each strike level shall 

be 0.6 for 2-Hour Bitcoin Cash Event Contracts, and 0.24 for 20-minutes Bitcoin 

Cash Event Contracts.

xix.(3) NUMBER OF STRIKE LEVELS LISTED – Nine (9) strike levels will be listed for 

each Intraday 2-Hour Bitcoin Cash Event Contract Series.

xx.(4) STRIKE LEVELS GENERATED - Strike levels will be generated such that 

Event Contract “Y” is valued ‘at-the-money’ in relation to the Underlying market as 

determined by the Source Agency, immediately before the issuance of these 

Contracts, and shall be measured in U.S. cents rounded to the nearest value ending 

in either 0.00, 0.01, 0.0025, 0.0050, 0.0075 as reported by the Source Agency. Four 

(4) strike levels will be generated above Event Contract X at an interval of Y and 

four (4) strike levels will be generated below Event Contract X at an interval of 

Y(e.g. Y – X; Y; Y + X). The Contract will have a Payout Criterion of greater than the 

strike level value.

b. (iii) Nadex may list additional Bitcoin Cash Event Contracts with different ranges 

of Payout Criteria on a discretionary basis in accordance with the CEA and Commission 

Regulations.

i.

ii.(f) MINIMUM TICK – The Minimum Tick size for Bitcoin Cash Event Contracts shall be $0.1.

iii.

iv.(g) POSITION LIMIT – The Position Limits for Bitcoin Cash Event Contracts shall be from 2,500 

to 25,000 Contracts per Class.

v.(h) MARKET MAKER ALTERNATIVE POSITION LIMIT – The Position Limit for the Bitcoin Cash 

Event Contracts for contracted Market Makers shall be from 5,000 to 50,000 per strike level.

vi.(i) LAST TRADING DATE – The Last Trading Date in a Series is the same as the Expiration Date. 

No trading in the Bitcoin Cash Event Contracts shall occur after its Last Trading Date.
Crypto.com | Derivatives North America

200 West Jackson Blvd., Suite 1400

Chicago, IL 60606

18

vii.(j) SETTLEMENT DATE – The Settlement Date will be the date on which the Bitcoin Cash price as 

reported by the Source Agency.

viii.(k) EXPIRATION DATE – The Expiration Date of the Contract will be the date on which the Bitcoin 

Cash price is released.

ix.(l) SETTLEMENT VALUE – The Settlement Value is the amount paid to the holder of the in the 

money Contract on the Settlement Date. The Settlement Value of an in the money Bitcoin Cash 

Event Contract is from $10 to $100.

x.(m) EXPIRATION VALUE – The Expiration Value is the Bitcoin Cash Index Value calculated and 

produced by the Source Agency on the Expiration Date. The Source Agency shall calculate and 

produce an BCH Index Value once each second throughout the life of the BCH Touch Bracket 

Contracts. That is, each second the Source Agency will calculate a BCH Index Value by taking by 

taking all U-BCH 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 (60) second period, removing the highest twenty (20) percent of U-BCH bid/ask midpoint 

prices and the lowest twenty (20) percent of U-BCH bid/ask midpoint prices from the data set7, 

and using the remaining U-BCH bid/ask midpoint prices to calculate the BCH Index Value for that 

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

the sixty (60) second period, the BCH Index Value will be calculated by the Source Agency by 

taking the last twenty-five (25) U-BCH bid/ask midpoint prices just prior to the Calculation Time, 

removing the highest five (5) U-BCH bid/ask midpoint prices and the lowest five (5) U-BCH bid/ask 

midpoint prices, and using the remaining fifteen (15) U-BCH bid/ask midpoint prices to calculate 

the BCH Index Value. The calculation used is a simple average of all fifteen (15) U-BCH bid/ask 

midpoint prices, rounded to one decimal point past the precision of the Underlying market.

xi.(n) 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.

c.

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.