Why Derivatives Clearing is a Defining Step in tZERO’s Market Infrastructure Strategy

DCO approval adds a critical layer to the infrastructure institutions need as traditional and digital markets converge

An institution bringing a new financial product to market needs more than a way to trade it. It needs a framework for determining who can participate, how obligations will be met and what happens when something goes wrong.

That is why tZERO’s registration as a derivatives clearing organization matters. It adds a critical piece to the regulated infrastructure we have spent years building – and creates a foundation for institutional partners to develop a broader range of financial offerings.

The Commodity Futures Trading Commission (CFTC) registered tZERO DCO, LLC as a derivatives clearing organization on October 16, 2026, permitting it to clear fully collateralized futures, options on futures and swaps. Our application for a designated contract market, or DCM, is pending. If approved, it would add a derivatives exchange alongside the clearinghouse, subject to applicable requirements and operational readiness. [1][2]

Together, these capabilities would extend tZERO’s Infrastructure-as-a-Service model from securities into derivatives, helping institutions build offerings for their own customers across more of the financial market.

What happens after a trade matters

An exchange brings buyers and sellers together under a common set of trading rules. A clearinghouse manages the obligations created by eligible trades, including settlement and counterparty risk – the risk that one side cannot meet its commitments. [3]

Consider a contract that pays out based on an economic outcome. Agreeing on a price is only the beginning. The market also needs clear rules for funding the obligation, determining the outcome and paying the party entitled to receive funds.

For fully collateralized contracts, the resources required to cover the contractual exposure are provided upfront under the applicable rules. Clearing gives that process an accountable operator and a defined framework. It helps manage risk; it does not eliminate investment losses or every operational risk.

A DCO registration and a DCM designation therefore serve different purposes. The exchange governs trading. The clearinghouse supports performance and settlement. Building both means addressing the market beyond the transaction on the screen.

Why these registrations are uncommon

Operating a regulated exchange or clearinghouse requires substantial financial, operational and regulatory commitments.

The CFTC requires DCOs to maintain resources and controls covering risk management, settlement, participant funds, default procedures, governance and systems resilience. DCMs must meet 23 core principles, including requirements concerning market integrity, surveillance and financial resources. These obligations continue after approval. [3][4]

tZERO’s own registration order reflects that scrutiny: the CFTC reviewed its application and rules and conducted a technical evaluation of its proposed operations before concluding that it demonstrated compliance with the applicable registration requirements. [5]

Those responsibilities help explain why clearing is concentrated among a limited group of specialist organizations. The field includes established market infrastructure providers and a growing number of digital asset and event market businesses. tZERO joins that group. [6]

The convergence is already taking shape

Traditional and digital finance increasingly meet in the infrastructure supporting a trade.

In March 2025, CME Group and Google Cloud announced a pilot involving wholesale payments and asset tokenization. CME identified potential efficiencies in collateral, margin, settlement and fee payments as markets move toward longer trading hours. The initiative illustrates why blockchain technology is relevant to the operations of established financial markets. [7]

In June 2025, Coinbase Derivatives and Nodal Clear announced plans to integrate USDC as eligible collateral for U.S. futures, working with the CFTC. The announcement described a planned initiative, rather than a completed launch. Its significance was the proposed connection between a digital dollar and the collateral process of a regulated derivatives market. [8]

These examples point toward a practical form of convergence: using digital assets and programmable infrastructure within markets that retain clear legal obligations and accountable operators.

Decentralized finance adds another dimension. Smart contracts can automate collateral movements, trading and settlement. Institutions still need answers about asset eligibility, legal rights, custody, valuation and responsibility when systems fail. Connecting those technologies with regulated infrastructure requires work across all of those areas.

A DCO registration does not automatically authorize every token as collateral or every DeFi connection. It establishes a regulated foundation on which eligible services can be developed.

What makes the combination important for tZERO

tZERO’s differentiator is the breadth of infrastructure we are assembling for institutional partners.

Our existing capabilities include securities brokerage, an alternative trading system, digital asset securities custody and an SEC-registered transfer agent. The DCO adds derivatives clearing. A DCM approval would add a derivatives exchange to that mix. These functions sit within distinct regulated entities, each with its own responsibilities and permissions. [1][2][9]

The distinction is how we bring these capabilities to market. Through tZERO’s Infrastructure-as-a-Service model, institutions can build offerings under their own brands, retain their customer relationships and draw on our regulated infrastructure. Adding derivatives clearing to our securities capabilities expands what we can help those partners develop. With our DCM application pending, we are building toward a broader offering that connects securities and derivatives infrastructure with distribution through institutions and the customers they serve.

That distribution model matters. The opportunity reaches beyond investors who come directly to tZERO to include institutions and the customers they serve through our partner network.

For example, a financial platform exploring an eligible derivatives offering needs to consider trading, clearing, onboarding, access and ongoing operations together. Our expanding infrastructure creates more scope to help partners address those requirements, subject to the relevant registrations, product rules and implementation work.

It does not mean securities and derivatives can automatically share collateral, accounts or regulatory treatment. It means tZERO can develop a broader set of services around a partner’s needs.

Building the infrastructure for what comes next

As traditional and digital finance converge, institutions need infrastructure that can support new technology while meeting the obligations of regulated markets.

Our DCO approval is a major step in that work. With our DCM application pending, we are building toward a model that brings securities and derivatives capabilities into a broader institutional infrastructure offering.

For our partners, the value lies in what that enables them to build – and in the customers they can reach.

Reach out today to talk to our team: sales@tzero.com

Sources and publication notes

1. CFTC tZERO DCO registration record: https://www.cftc.gov/IndustryOversight/IndustryFilings/ClearingOrganizations/59186
2. CFTC tZERO DCM pending application: https://www.cftc.gov/IndustryOversight/IndustryFilings/TradingOrganizations/58712
3. CFTC clearing organization requirements: https://www.cftc.gov/IndustryOversight/ClearingOrganizations/index.htm
4. CFTC designated contract market requirements: https://www.cftc.gov/IndustryOversight/TradingOrganizations/DCMs/index.htm
5. CFTC tZERO DCO order linked from the registration record in source 1.
6. CFTC DCO register: https://www.cftc.gov/IndustryOversight/IndustryFilings/ClearingOrganizations ; Coinbase Clearing record: https://www.cftc.gov/IndustryOversight/IndustryFilings/ClearingOrganizations/64361
7. CME Group and Google Cloud announcement March 25, 2025: https://www.cmegroup.com/media-room/press-releases/2025/3/25/cme_group_will_introducetokenizationtechnologytoenhancecapitalma.html
8. Coinbase and Nodal Clear announcement June 18, 2025: https://www.coinbase.com/blog/coinbase-derivatives-and-nodal-clear-partner-in-usdc-integration
9. tZERO company infrastructure overview: https://www.tzero.com/company ; supplied DCO approval press release.

About tZERO Group, Inc.

tZERO Group, Inc. (tZERO) and its broker-dealer subsidiaries provide an innovative liquidity platform for private companies and assets. We offer institutional-grade solutions for issuers looking to digitize their capital table through blockchain technology, and make such equity available for trading on an alternative trading system. tZERO, through its broker-dealer subsidiaries, democratizes access to private assets by providing a simple, automated, and efficient trading venue to broker-dealers, institutions, and investors. All technology services are offered through tZERO Technologies, LLC. For more information, please visit our website.

About tZERO DCO, LLC

tZERO DCO, LLC is a derivatives clearing organization (DCO) registered with the Commodity Futures Trading Commission ("CFTC"). More information about tZERO DCO, LLC can be found here.

Investor Notice

Digital asset securities, derivatives, as well as any particular investment, may not be suitable or appropriate for everyone. Investors should note that investing or trading in securities, futures, options, swaps, and event contracts could involve substantial risks, including no guarantee of returns, costs associated with selling and purchasing, and holding positions, and no assurance of liquidity which could impact their price and investor’s ability to sell, enter or exit a position, and possible loss of principal invested, including the possibility of losing more than your initial investment where leverage or margin is involved. There are also unique risks specific to digital assets, including, without limitation, fraud, manipulation, theft, and loss.

Futures, options, swaps, and event contracts carry additional risks specific to derivatives, including, without limitation, the potential for rapid and substantial losses due to leverage, the risk that a position cannot be closed at a favorable price or at all, and, with respect to event contracts specifically, the risk that a contract's terms, settlement, or continued listing may be affected by evolving regulatory requirements, including determinations by the Commodity Futures Trading Commission as to whether an event contract may be listed or must be delisted.

This notice is a general summary and does not describe every risk associated with these products. Before trading futures, options, swaps, or event contracts, you should review the applicable CFTC risk disclosure statement furnished to you at account opening, which is a distinct, regulation-required document and is not superseded or replaced by this notice.

No Offer, Solicitation, Investment Advice or Recommendations

This release is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation for any security, future, option, swap, or event contract, nor does it constitute an offer to provide investment advisory or other services by tZERO or any of its affiliates, subsidiaries, officers, directors or employees or an opinion as to the suitability of any such product for any particular person. In preparing the information contained in this release, we have not taken into account the investment needs, objectives, risk tolerance and financial circumstances of any particular investor and the products discussed may not be suitable for all investors or market participants. This release is not directed at, and is not intended for distribution to or use by, any person in any jurisdiction where such distribution or use would be contrary to applicable law or regulation. Any views expressed in this release by us were prepared based upon the information available to us at the time such views were written. Changed or additional information could cause such views to change. All information is subject to possible corrections. Information may quickly become unreliable for various reasons, including changes in market conditions, regulatory developments or economic circumstances.

Forward-Looking Statements by tZERO

This release contains forward-looking statements. In addition, from time to time, tZERO, its subsidiaries, or its representatives may make forward-looking statements orally or in writing. These forward-looking statements are based on expectations and projections about future events, which is derived from currently available information. Such forward-looking statements relate to future events or future performance, including financial performance and projections; growth in revenue and earnings; and business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including, without limitation: the ability of tZERO and its subsidiaries to change the direction; tZERO’s ability to keep pace with new technology and changing market needs; performance of individual transactions; regulatory developments and matters; and competition. These and other factors may cause actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this release and other statements made from time to time by tZERO, its subsidiaries or their respective representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions. tZERO, its subsidiaries, and its representatives are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forward-looking events discussed in this release and other statements made from time to time by tZERO, its subsidiaries or its representatives might not occur. ​This press release is for informational purposes only and does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase any security. The securities described herein are subject to qualification by the U.S. Securities and Exchange Commission under Regulation A+ (Tier 2) and have not yet been so qualified. No money or other consideration is being solicited, and if sent in response, will not be accepted. No offer to buy the securities can be accepted and no part of the purchase price can be received until the offering statement is qualified, and any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of its acceptance given after the date of qualification. A person's indication of interest involves no obligation or commitment of any kind.