Coinbase Lands Regulatory Approval to Offer Crypto Futures Trading in US

Coinbase Financial Markets, Inc. announced this Wednesday that it has secured approvals from both the National Futures Association (NFA) and the Commodity Futures Trading Commission (CFTC).

That means that the firm can now operate as a Futures Commission Merchant (FCM), and will therefore be able to offer investments in crypto futures to eligible customers in the United States.

However, the company indicated on its website that the service wouldn't be immediately available, urging users to join a waitlist for early access.

Coinbase is now poised to be the pioneer in offering U.S. clients both traditional spot crypto trading and regulated crypto futures.

“A significant milestone”

“This is a significant milestone for bringing federal regulatory oversight over the crypto markets”, Faryar Shirzad, Chief Policy Officer for Coinbase, told Decrypt. “Under the supervision of the CFTC and NFA, Coinbase will be able to offer regulated futures in a manner that protects consumers and helps ensure that the U.S. remains a center for digital innovation. Coinbase looks forward to meeting the CFTC and NFA’s high standards and providing Americans with more financial options”.

As the company explained in its blog post announcing the news, obtaining those legal approvals has been a long journey. Coinbase filed an application with the NFA to register an FCM back in September 2021.

Coinbase has laid the groundwork to offer crypto derivatives for months. In 2022, the company acquired FairX, a CFTC-regulated futures exchange now known as the Coinbase Derivatives Exchange.

Coinbase Derivatives to Launch Institutional Bitcoin and Ethereum Futures

Coinbase Derivatives Exchange will offer its institutional clients “institutional-sized” Bitcoin and Ethereum tracked futures starting next week, the company announced Thursday.  The derivatives arm of America’s biggest crypto exchange said that the BTI and ETI futures contracts are sized at 1 BTC and 10 ETH per contract. Derivatives are financial contracts which depend on the underlying value of a particular asset. In the world of crypto, the derivatives market sees traders buy contracts on the...

The exchange has launched nano Bitcoin and Ethereum futures contracts, sized for the retail investor, and on June 5, launched larger versions for the institutional market.

Having access to the crypto derivatives markets opens up a potentially huge market for Coinbase, which claims that it represents roughly 75% of worldwide crypto trading.

In the midst of its legal battle with the SEC, the company has presented this new development as proof of its commitment to align with U.S. regulations. In early June, the regulatory body initiated legal action against Coinbase, accusing the exchange of breaching local securities regulations through the sale of unregistered securities.