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Coinbase secures approval to offer crypto futures to US customers

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Major U.S. crypto exchange Coinbase Global Inc. said today that it received approval from the National Futures Association to offer digital asset futures to eligible customers based in the United States two years after filing the necessary paperwork and working with regulators.

The NFA is a self-regulatory body overseen by the Commodities and Futures Trading Commission that governs the U.S. derivatives industry, including on-exchange traded futures, by registering and regulating futures professionals and enforcing compliance with CFTC regulations.

Coinbase Financial Markets Inc., a subsidiary of Coinbase, now has regulatory approval to operate as a futures commission agent and to offer eligible U.S. customers access to crypto futures from its platform. This means that users will be able to trade crypto assets at fixed prices at specified times in the future, similar to what can be done on stock exchanges and other commodities trading venues.

“Major moment for crypto regulatory clarity in the U.S.,” wrote Coinbase Chief Executive Brian Armstrong in a tweet announcing the approval. “This has been a multi-year process toward approval, and we’re excited to finally be launching federally regulated crypto derivatives with margin to our U.S. customers. When there is a clear path to register, we do.”

The company filed its application for approval in September 2021 and worked with regulators to make certain that the process would go smoothly. The global crypto derivatives market represents approximately 75% of all crypto trading worldwide, as result it is a major point for accessing digital assets. The company said that this will make Coinbase the first crypto-native platform to offer traditional spot trading alongside regulated and leveraged crypto futures on an integrated solution in the U.S.

Last year, Coinbase acquired FairX, a CFTC-regulated futures exchange that the company rebranded as Coinbase Derivatives Exchange. The exchange opened up futures for institutional clients with its launch on June 5. With approval from the NFA as a futures commission agent, Coinbase will now be able to offer futures to individual users in the U.S. as well.

“Obtaining FCM approval was our next step in bringing these transparent and secure markets to our customers so they can access regulated futures contracts alongside our liquid spot market,” said Greg Tsuar, vice president of institutional product at Coinbase. “In the coming months, we’ll provide additional information on how our verified U.S. customers can access our futures offering.”

This news comes as Coinbase is embroiled in legal action with another regulator. The Securities and Exchange Commission sued Coinbase alleging that the company has been operating an unregistered securities exchange and broker. In addition, the SEC also charged Coinbase over its crypto asset staking rewards program, which it claimed the company failed to register.

In a previous dispute with the SEC, Coinbase delayed and ultimately cancelled the launch of its cryptocurrency lending product Coinbase Lend in September 2021 after the SEC filed suit alleging that it would amount to offering a security.

Photo: Coinbase

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