Coinbase (COIN) Offers Regulated Futures Trading to US Retail Customers

Table of Contents

• Traders can Access Nano-Sized Futures Contracts
• Coinbase Cautions Against Risk
• A “Watershed Moment”

Coinbase has launched its regulated crypto futures trading to Coinbase Advanced customers in the United States. In August, Coinbase Financial Market (CFM) obtained approval to offer such services from the National Futures Association (NFA). 

On Wednesday, Coinbase announced that its regulated crypto futures service is now available to eligible customers in the US. Coinbase Financial Markets (CFM) obtained regulatory approval to offer futures trading to retail customers in the US and became the first crypto-native leader to offer access to such services. Through CFM, Coinbase will provide federally regulated crypto futures contracts to select customers in the country. 

Coinbase applied to register as a Futures Commission Merchant with the NFA in 2021 and has worked closely with regulators to ensure its compliance.

“In September of 2021, we filed an application with the NFA to register an FCM. Our team has worked with regulators since then to ensure we will comply with all the necessary regulations and that our FCM’s business model meets the CFTC’s customer protection requirements,” the exchange said. 

Traders can Access Nano-Sized Futures Contracts

In a blog post announcing the news, Coinbase said:

“CFM is pleased to announce that Coinbase Advanced customers in the US can now access regulated crypto futures contracts. These futures contracts are specifically sized for retail traders, at 1/100th of a Bitcoin and 1/10th of an Ethereum.” 

Coinbase explained that CFM aims to make futures contracts more accessible to retail traders. With its newly launched feature, “traders in the US can now use the Coinbase Advanced platform to access spot (through Coinbase Inc) and futures (through CFM)-- all through one integrated, secure, and easy-to-use platform.” 

CFM further aims to make futures trading more accessible by “offering a library of educational content.” The platform offers traders “Coinbase Learn,” a set of articles explaining futures topics such as the benefits and risks and the need-to-know basics of futures trading. 

Coinbase Cautions Against Risk

Coinbase was quick to highlight the risk associated with futures trading. The platform explained that futures allow traders to hedge their risk, diversify their portfolios, trade with leverage, and speculate on which way the market will go, but did note the associated risk.

“Leverage in futures trading can work for you or against you. The risk of loss using leverage can exceed your initial investment amount.” 

A “Watershed Moment”

In its announcement sharing the news of regulatory approval, Coinbase explained the significance of being able to offer its users crypto futures contracts in Bitcoin (BTC) and Ether (ETH): 

“We believe this is a watershed moment to be able to bring regulated crypto products to US customers. This is a critical milestone that reaffirms our commitment to operate a regulated and compliant business and be the most trusted and secure crypto-native platform for our customers.” 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.