Coinbase, one of the leading cryptocurrency exchanges, has received approval from the National Futures Association (NFA) to offer crypto futures trading to eligible U.S. customers. In addition to this, Coinbase has also been approved to operate as a Futures Commission Merchant (FCM). This latest development positions Coinbase as the first crypto platform to directly provide traditional spot crypto trading along with regulated and leveraged crypto futures.
A Significant Step Forward
Greg Tusar, the Head of Institutional Product at Coinbase, expressed his excitement in a recent blog post, stating that this approval served as a “critical milestone” for the company. He emphasized that this development reaffirms Coinbase’s commitment to being a regulated and compliant business, ultimately making it the most secure crypto platform for its customers.
Achieving Compliance
Coinbase filed its application with the NFA in September 2021 to become an FCM. Since then, Tusar stated that the team has worked closely with regulators to ensure that regulatory compliance rules and customer protection requirements are met. Tusar remarked on the development, saying, “We believe this is a watershed moment to be able to bring regulated crypto products to U.S. customers.”
Expanding Derivatives Market
The global crypto derivatives market represents approximately 75% of crypto trading volume worldwide, making it a critical access point for traders. With the recent NFA approval, Coinbase customers now have the opportunity to access regulated futures contracts.
Coinbase Derivatives Exchange
In 2022, Coinbase acquired the CFTC-regulated futures exchange, FairX, now known as the Coinbase Derivatives Exchange. The exchange initially launched Nano Bitcoin and Ethereum futures contracts for retail users, followed by a version for institutional users in June. The blog post also noted that the Coinbase Derivatives Exchange has established a deep liquidity pool, with $4.7 billion in BTC and $2.0 billion in ETH futures traded in notional volume so far in 2023.
Following this announcement, Coinbase’s stock closed at $79.18 in the previous trading session. During the pre-market hours on Wednesday, August 16, the company’s stock saw an increase of 6.57%, trading at $84.
