1

UNITED STATES OF AMERICA

Before the

COMMODITY FUTURES TRADING COMMISSION

_______________________________________

In the Matter of the Application of 

Eris Clearing, LLC

For Registration as a Derivatives Clearing Organization

_______________________________________

ORDER OF REGISTRATION

Eris Clearing, LLC (“Eris Clearing”) has submitted to the Commodity Futures Trading 

Commission (the “Commission”), pursuant to Section 5b of the Commodity Exchange Act (the 

“Act”), 7 U.S.C. § 7a-1, an application for registration as a derivatives clearing organization 

(“DCO”).

The Commission has reviewed the application and finds that Eris Clearing has 

demonstrated compliance with the requirements of the Act and applicable Commission 

regulations thereunder.

In light of the foregoing, IT IS ORDERED, pursuant to Section 5b of the Act, 

7 U.S.C. § 7a-1, that Eris Clearing is granted registration as a DCO, subject to the terms and 

conditions specified herein:

(1) Cleared Products. Eris Clearing is permitted to clear, in its capacity as a DCO, 

fully collateralized virtual currency futures. A contract cleared by Eris Clearing will be 

considered fully collateralized if Eris Clearing holds, at all times, funds sufficient to cover the 

maximum possible loss a counterparty could incur upon liquidation or expiration of the contract, 

in the form of the required payment.

(2) Commencement of Clearing. Eris Clearing shall not commence clearing under 

this order prior to demonstrating to the satisfaction of the Division of Clearing and Risk 

(“Division”) compliance with separate commitments made to the Division.
2

(3) Treatment of Funds. Funds held in the Member Property Accounts (as this term 

is defined in Eris Clearing’s rulebook) shall be considered member property, as that term is 

defined in the Bankruptcy Code. Eris Clearing shall at all times maintain funds of its clearing 

members separate and distinct from its own funds.

(4) Restriction on FCM Clearing Members. This order does not permit any FCM 

Clearing Member (as this term is defined in Eris Clearing’s rulebook) to clear on behalf of 

Customers (as this term is defined in Eris Clearing’s rulebook) at Eris Clearing. Prior to 

permitting FCM Clearing Members to clear on behalf of Customers, Eris Clearing shall submit 

all rules applicable to customer clearing to the Commission pursuant to Commission Regulation 

40.5 or 40.6.

(5) Insurance. Eris Clearing shall obtain and endeavor to maintain to the extent 

commercially reasonable insurance coverage for theft or loss of participant virtual currency 

collateral.

(6) Risk Disclosure. Eris Clearing shall fully disclose to any potential clearing 

member, in plain language, material risks associated with the clearing of fully collateralized 

virtual currency contracts, including, without limitation, the theft, loss, or hacking of the 

underlying virtual currency. The disclosure may include a discussion of any mitigating 

insurance or similar policies so long as the scope and limitations of any policy are clearly 

explained.

(7) Report on Internal Controls of Financial Reporting. Within three years of the date 

of this order, Eris Clearing shall require its independent certified public accountant to have 

performed a System and Organization Controls (“SOC”) 1 – Type II audit, a copy of which shall

be provided to the Division within 30 days following the issuance of the report. Prior to the 
3

execution of the audit agreement, Eris Clearing shall report to the Division the name of the 

certified public accounting firm that has been selected to perform the audit, the scope of the 

audit, and a timeline for completion of the audit.

(8) Virtual Currency Audit. Eris Clearing shall engage an independent certified 

public accountant to audit Eris Clearing’s virtual currency balances and issue an opinion on the 

accounting treatment of virtual currency held by Eris Clearing on an annual basis.

(9) Virtual Currency Third-Party Service Providers. Eris Clearing shall obtain and 

provide to the Division, as available to Eris Clearing, a copy of any SOC 1 – Type I or Type II 

audit report of any third-party service provider used in the custody or storage of any virtual 

currencies held on behalf of clearing members.

(10) Compliance with Certain Statutes. Eris Clearing shall comply with the Bank 

Secrecy Act (31 U.S.C. § 5311 et seq.), the International Emergency Economic Powers Act (50 

U.S.C. § 1701 et seq.), the Trading with the Enemy Act (50 U.S.C. § 4301 et seq.), and the 

Executive Orders and regulations issued pursuant thereto, including the regulations issued by the 

U.S. Department of the Treasury and, as applicable, the Commission as if Eris Clearing were a 

covered “financial institution” within the meaning of 31 C.F.R. § 1010, et seq.

(11) Compliance with the Act and Commission Regulations. Eris Clearing shall 

comply, and shall demonstrate compliance as requested by the Commission, with applicable 

provisions of the Act, including the core principles set forth in Section 5b of the Act (“Core 

Principles”), and Commission regulations, as may be amended or adopted from time to time. 

Eris Clearing shall fulfill each of the representations it has made to the Commission relating to 

compliance with the Core Principles and Commission regulations.