tZERO has secured approval from the Commodity Futures Trading Commission (CFTC) to operate a designated contract market (DCM), clearing the way for the blockchain and digital securities company to launch an exchange supporting prediction markets and other derivatives.
The CFTC designated tZERO DCM, LLC on Nov. 10, following its Oct. 16 registration of tZERO DCO, LLC as a derivatives clearing organization. Together, the approvals give tZERO the regulatory infrastructure to operate both an exchange and a clearinghouse. Today’s designation came just under a year after tZERO submitted its DCM application on Nov. 21, 2025.
The approval comes days after tZERO announced plans to go public through a $350m SPAC merger. The company expects to list on NYSE American under the ticker TZRO in early 2027.
According to the CFTC’s designation order, the exchange will use an anonymous electronic central limit order book, with contracts cleared on a fully collateralized basis. The order also prohibits futures commission merchants from intermediating transactions or carrying customer accounts on the exchange.
Under the rulebook submitted with its DCM application, tZERO would accept only US dollars to fund trading obligations and as collateral, despite the company’s broader focus on blockchain and tokenized assets.
The approval marks another step in tZERO’s expansion beyond digital securities, with the company preparing to offer derivatives infrastructure to financial institutions and other partners.
tZERO plans event contracts, derivatives expansion
When it announced its CFTC applications in September 2025, the company identified prediction markets among the products it hoped to support, alongside futures, options and other derivatives.
tZERO also outlined plans for tokenized and fractionalized derivatives, using blockchain-based smart contracts to create customizable financial products and potentially broaden investor participation.
Following its clearinghouse registration in October, tZERO said it intended to support event contracts, perpetual futures and other derivatives, including through white-label arrangements.
“Institutions increasingly want the flexibility to bring multiple asset classes to their customers, and our Infrastructure-as-a-Service model is built to help them do that,” tZERO CEO Alan Konevsky said in the company’s Oct. 20 announcement.
tZERO targets institutional derivatives partners
The company said in October that its strategy also includes providing access to products on third-party markets through its introducing broker, alongside contracts traded and cleared through its own infrastructure.
“We saw an opportunity to make trading and clearing capabilities part of the infrastructure we offer institutional partners,” tZERO chief strategic relationships officer Al Swimmer said in October. “For a firm considering a derivatives offering, the challenge extends well beyond choosing a product — it includes the infrastructure and relationships needed to bring that product to market.”
Swimmer also emphasized the regulatory safeguards behind the company’s expansion when it first announced its applications in September 2025.
“By having a CFTC-regulated DCO and DCM, tZERO could bring futures-level discipline and transparency to the next generation of markets,” he said.
Although tZERO is targeting institutional partners, its infrastructure could ultimately provide retail customers with access to event contracts through financial platforms using its services. The company has not announced when trading will begin or which products will be available.