CFTC Approves Coinbase’s Self-Certified Futures Contracts for DOGE, LTC, and BCH

Table of Contents

• TLDR

Coinbase Derivatives, a subsidiary of the leading cryptocurrency exchange Coinbase, has announced plans to launch cash-settled futures contract products for Dogecoin (DOGE), Litecoin (LTC), and Bitcoin Cash (BCH) as early as April 1, 2024.

TLDR

• Coinbase Derivatives plans to launch cash-settled futures contract products for Dogecoin, Litecoin, and Bitcoin Cash as early as April 1, 2024.
• Coinbase is using the “self-certification” method to list the futures contracts, ensuring compliance with CFTC regulations without requiring direct approval.
• The exchange believes Dogecoin has transcended its meme origins to become a staple in the cryptocurrency industry.
• Analysts suggest that listing futures contracts for these cryptocurrencies may be a strategic move by Coinbase to force the SEC to classify them as commodities rather than securities.
• The CFTC has approved Coinbase’s application to list the futures contracts, which will begin trading on or after April 1, 2024.

The exchange submitted three separate letters to the U.S. Commodity Futures Trading Commission (CFTC) on March 7, detailing its intention to list the futures contracts using the “self-certification” method.

By invoking the self-certification rule, Coinbase can list the futures contracts without awaiting direct approval from the CFTC, as long as the products adhere to the agency’s regulatory guidelines. This move has drawn attention from market analysts, who suggest that Coinbase’s decision to pursue futures listings for these specific cryptocurrencies may have broader implications related to their regulatory classification.

Coinbase Derivatives LLC quietly filed certifications with CFTC to list US regulated futures for Dogecoin, Litecoin and Bitcoin Cash.

They filed them on March 7 and surprisingly nobody seemed to notice.

Futures are set to start trading on April 1 if there are no objections from… pic.twitter.com/DYbWjuS6G2

— Summers (@SummersThings) March 20, 2024

In its letter concerning the Dogecoin futures product, Coinbase justified the listing by stating that the memecoin had transcended its origins as a joke and had risen to become a foundational element of the crypto industry. The exchange cited Dogecoin’s enduring popularity and active community support as evidence of its established position in the cryptocurrency world.

Analysts have speculated that Coinbase’s move to list futures contracts for Dogecoin, Litecoin, and Bitcoin Cash may be a strategic play to force the Securities and Exchange Commission (SEC) to classify these assets as commodities rather than securities.

Bloomberg ETF analyst James Seyffart noted that since these cryptocurrencies are based on the same proof-of-work consensus mechanism as Bitcoin, which has been approved for spot ETFs, it would be difficult for the SEC to argue that they are securities.

The CFTC has approved Coinbase’s application to list the futures contracts, which will begin trading on or after April 1, 2024. Following the news, each of the three tokens experienced above-average price gains, with DOGE up 16.1%, BCH up 11.4%, and LTC up 7.8%, compared to the overall crypto market’s 6.2% increase.

As the regulatory landscape for cryptocurrencies continues to evolve, Coinbase’s move to launch futures contracts for Dogecoin, Litecoin, and Bitcoin Cash may set a precedent for other exchanges to follow suit.

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