The Futures Industry Association in a letter released Thursday chided the Commodity Futures Trading Commission over plans to start bitcoin futures trading later this month.
The letter to CFTC Chairman J. Christopher Giancarlo from Walter Lukken, CEO of the association, said the launches by CME Group and Cboe Global Markets "did not allow for proper public transparency and input."
While both futures exchanges by law can self-certify such derivatives products, Mr. Lukken wrote: "This process does not distinguish for a product's risk profile or unique nature. We believe that this expedited self-certification process for these novel products does not align with the potential risks that underlie their trading and should be reviewed."
FIA's clearing members would have to absorb the risk of bitcoin futures products in the event of a default, so the issue of how to collateralize the futures should have been discussed, Mr. Lukken wrote.
"A public discussion should have been had on whether a separate guarantee fund for this product was appropriate or whether exchanges put additional capital in front of the clearing member guarantee fund," the letter added.
CME and Cboe on Dec. 1 filed certifications with the CFTC to offer bitcoin futures contracts. Cboe's contract will launch Dec. 11 on the Cboe Futures Exchange while the CME will launch its contract Dec. 18 on the CME Globex electronic trading platform.
The letter is on the FIA's website.