Coinbase has received regulatory approval from the National Futures Association [NFA] to offer crypto futures trading to eligible U.S. customers. Alongside, it has also received the green light to operate a Futures Commission Merchant [FCM].
The latest development allegedly makes Coinbase the first crypto platform to directly offer traditional spot crypto trading along with regulated and leveraged crypto futures. In a recently shared blog-post, Greg Tusar, the Head of Institutional Product at Coinbase, said that this served as a “critical milestone” and reaffirmed the company’s commitment to operate a regulated and compliant business. In effect, it puts Coinbase on the path to being the most secure crypto platform for customers.
A ‘Watershed’ Moment
The exchange filed an application with the NFA in September 2021 to operate an FCM. Tusar pointed out that the team had worked with regulators since then to ensure regulatory compliance rules and customer protection requirements were met. Commenting on the latest development, Tusar said,
“We believe this is a watershed moment to be able to bring regulated crypto products to U.S. customers.”
The blog post went on to point out that the global crypto derivatives market represents roughly 75% of crypto trading volume worldwide. Consequentially, it is a ‘critical’ trader access point. Thus, the latest NFA approval will give Coinbase customers the chance to access regulated futures contracts.
Coinbase acquired CFTC-regulated futures exchange, FairX, in 2022. This is now known as the Coinbase Derivatives Exchange. The exchange initially launched Nano Bitcoin and Ethereum futures contracts for its retail user base. Then, in June, it launched another version for its institutional users. The blog post highlighted that 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.
Coinbase’s stock closed yesterday’s trading session at $79.18. During the pre-market hours on Wednesday, August 16, COIN was valued at 6.57% higher, at $84.38.