CFTC approves tZERO derivatives exchange ahead of $350M merger

The CFTC registration was granted to tZERO DCM, LLC, on November 10, according to the regulator’s records. The company announced it on November 11. It follows an October 16 approval for tZERO DCO, LLC, as a derivatives clearing organization. Together, the registrations allow the subsidiaries to develop separate trading and clearing services under federal rules.

The clearinghouse registration permits tZERO DCO to clear fully collateralized futures, options on futures and swaps, according to the regulator. tZERO has identified event contracts, conventional and tokenized derivatives, perpetual futures and other cryptocurrency products as possible offerings. Each product remains subject to applicable regulatory requirements, and the exchange and clearing operations must meet operational requirements before launch.

CEO Alan Konevsky called the two approvals a “major achievement” and said tZERO aims to provide independent market infrastructure to institutions that do not run their own regulated exchanges or clearinghouses. Through its Infrastructure-as-a-Service business, the company plans to offer the services to banks, brokers and other financial institutions. Its existing businesses include broker-dealer services, alternative trading systems, custody, transfer agency and settlement.

The approvals also meet the first earn-out milestone in tZERO’s merger agreement with FG Imperii. Announced November 2, the proposed deal values tZERO at $350 million before the merger and includes up to $25 million in milestone-linked consideration. FG Imperii could contribute approximately $231 million from its trust account, depending on shareholder redemptions and excluding transaction expenses. The merger is expected to close in early 2027, subject to shareholder approval, regulatory requirements and other conditions. The combined company is expected to trade on NYSE American under the ticker TZRO.

Separately, tZERO is developing infrastructure for tokenized securities. In August, Intercontinental Exchange selected the company to help develop infrastructure for a planned NYSE-affiliated tokenized securities platform. That project remains subject to regulatory approvals, and no public launch date has been announced. tZERO had not responded to a request for comment by press time.