Source: Coinspeaker; Translation: Blockchain Knight
Leading US crypto exchange Coinbase has obtained regulatory approval to offer BTC and ETH futures contracts to eligible US clients.
The company will operate as a Futures Commission Merchant (FCM), a type of derivatives exchange regulated by the National Futures Association (NFA).
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The NFA is a self-regulatory organization under the Commodity Futures Trading Commission (CFTC) responsible for overseeing the derivatives industry in the United States, including trading futures, retail off-exchange forex, and over-the-counter derivatives.
On August 16, Coinbase announced in a blog post that it had received approval from the NFA to officially participate in futures trading.
According to the company, they had submitted an application to register as an FCM with the NFA as early as September 2021. After two years of review, the company finally obtained approval.
With this approval, Coinbase becomes the first crypto-native exchange able to directly offer both derivatives and spot trading services to clients.
The company stated, “Coinbase will now become the first crypto-native leader to directly offer comprehensive trading solutions to verified customers.”
The exchange describes its latest achievement as a “significant milestone” and notes that it has met strict requirements for approval.
Coinbase customers will soon be able to access futures trading directly through its platform, as the company has laid the foundation for its derivatives products. Last year, the exchange acquired FairX, which now operates as Coinbase’s derivatives exchange.
The platform is open to third-party brokers, FCMs, and market makers, and has built up considerable liquidity, facilitating many trades in BTC and ETH futures.
In June of this year, Coinbase announced its plans to launch BTC and ETH futures trading designed for institutional investors. Prior to this, the company had expressed its consideration of launching a derivatives platform in Bermuda.
In its blog post, Coinbase also states that 75% of global crypto trading volume comes from the derivatives market. “Margin” trading provides clients with market advantages compared to spot options trading.
At the same time, it is worth noting that Coinbase’s milestone comes at a time when the exchange is also facing legal challenges. The SEC filed a lawsuit against the company in June, accusing it of operating as an unregistered exchange in the United States.
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