The article alludes to this at the end but doesn't talk the real reason head on. As these are leveraged products the banks are exposed to large swings in the contract price via various clearing mechanisms. So they are looking at the volatility and asking what happens when someone doesn't pay and we have to step in and cover them. BTC is a bit of a volatile underlying. If I was in clearing risk I would be worried too.

This is worth paying attention to though, the CFTC has traditionally had a lackadaisical approach to approving financial products, where other agencies are typically risk averse and out in much more rigor

This has led to Congress itself banning futures products

There are two futures contracts explicitly banned in the US, and another could easily ride into the tax reform bill

I know about cornering the onion market and the Onion Futures Act, what is the other banned futures contract in the US?

Box office futures

(Speculating on how many movie tickets would sell for a new movie, would be a great way to hedge and speculate)

This was shut down by congress right before it started, last minute addition to the financial reform bill while simultaneously getting the all clear from cftc

Being disrupted!

Lol