Published
8 months ago on
August 17, 2023
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In a major development, the Coinbase cryptocurrency exchange (COIN) has received regulatory approval to list crypto futures in the United States.
The approval comes nearly two years after the exchange had originally applied for approval to offer crypto futures in the markets.
A Long Wait Ends
Coinbase announced on Wednesday that it had secured approval from the National Futures Association (NFA) to operate as a Futures Commission Merchant (FCM). FCMs are similar to market makers, buying and selling futures contracts. With approvals in place, Coinbase has stated its intention to offer eligible US-based customers regulated derivatives products through Coinbase Financial Markets. These will be subject to the oversight of the National Futures Association and the Commodity Futures Trading Commission. The crypto exchange stated in a post on X,
“The National Futures Association, a CFTC designated SRO, has approved Coinbase Financial Markets. as a registered Futures Commission Merchant. Coinbase can now offer futures contracts in BTC and ETH to eligible customers in the US.”
The approval makes Coinbase the first crypto platform in the United States to offer traders regulated and leveraged crypto futures along with traditional spot trading. According to the announcement, Coinbase had applied for registration as a Futures Commission Merchant with the NFA in 2021.
“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.”
According to Coinbase, the approval will allow US customers to access regulated crypto derivatives and allow greater access to the larger crypto economy.
“We are pleased to announce that approval has been secured, which will allow eligible US customers to access regulated derivatives products through Coinbase Financial Markets and alongside our spot market for a seamless experience subject to the oversight of the CFTC and the NFA. Approval for US customers to access regulated crypto derivatives will allow more people to access the crypto economy in the United States in a safe way that helps keep the US at the center of digital innovation.”
Futures Contracts In Bitcoin And Ether
The company also put up a post on X, stating that it could now offer users cryptocurrency futures contracts in Bitcoin And ETH. Coinbase stated in a message,
“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.”
Other Approvals
The cryptocurrency unit of Cboe Global Markets, Cboe Digital, had already received approval from the CFTC to offer margined Bitcoin and Ether futures back in June. At the time, Christy Goldsmith Romero, the Commissioner of the CFTC, had stated,
“I have been vocal about the benefits of bringing appropriate crypto activities into the regulated space in order to protect customers, but in a way that supports oversight, accountability, transparency, and risk management.”
COIN shares have also registered a significant jump, opening 4% higher at $82.49. Currently, COIN is trading at around $79.
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.
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