- Coinbase has secured regulatory approval to start a crypto derivative market in the US.
- This approval allows Coinbase to operate as a registered Futures Commission Merchant.
- Coinbase says the global crypto derivatives market accounts for 75% of crypto trading volume.
The U.S.-based crypto exchange Coinbase has secured regulatory approval to start a crypto derivative market for eligible Americans.
In a recent tweet, Coinbase revealed that it received approval from the National Futures Association (NFA). The NFA is a designated self-regulatory organization under the Commodity Futures Trading Commission (CFTC). Under this license, Coinbase will operate as a registered Futures Commission Merchant (FCM).
In the official statement, Coinbase detailed its journey towards this regulatory achievement. The firm said it began in September 2021 after applying to the NFA for FCM registration. Since then, Coinbase has collaborated with regulatory authorities to ensure full compliance with all necessary regulations.
Meanwhile, Coinbase noted that its FCM business model has been meticulously designed to meet the customer protection requirements set forth by the CFTC. The approval enables Coinbase customers to trade regulated derivatives through its financial markets, working with existing spot markets. In particular, Coinbase mentioned that the license paves the way for the exchange to introduce regulated futures contracts in Bitcoin (BTC) and Ethereum (ETH) to eligible US customers.
Furthermore, Coinbase mentioned that its entry into regulated crypto derivatives is to expand access to the crypto economy in the United States. It aims to promote a safe way for more people to participate in digital asset trading. According to Coinbase’s findings, the global crypto derivatives market accounts for approximately 75% of crypto trading volume worldwide.
Meanwhile, Coinbase highlighted that its strategic acquisition of FairX in 2022 was pivotal in the recent regulatory approval. FairX, now known as the Coinbase Derivatives Exchange, was a CFTC-regulated futures exchange that introduced nano Bitcoin and Ethereum futures contracts. The platform catered to retail and institutional investors.
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