Coinbase to Offer Crypto Futures to US Customers

Coinbase gained regulatory approval to operate a Futures Commission Merchant (FCM) and offer eligible US customers access to crypto futures

Coinbase to Offer Crypto Futures to US Customers

The subsidiary of the crypto exchange Coinbase, Coinbase Financial Markets, has gained regulatory approval from the National Futures Association (NFA), a CFTC-designated self-regulatory organization, to operate a Futures Commission Merchant (FCM).

Futures Commission Merchant (FCM) is an entity that solicits or accepts orders to buy or sell futures contracts, options on futures, retail off-exchange forex contracts or swaps, and accepts money or other assets from customers to support such orders.

Therefore, the new license would allow Coinbase Financial Markets to offer eligible US customers all-round access to crypto futures on corporate platforms.

In the press release, the firm stated that it now aims to directly offer traditional spot crypto trading alongside regulated and leveraged crypto futures, on an integrated trading solution for verified customers.

Coinbase has been into crypto futures for a while. In 2022, it acquired FairX, a CFTC-regulated futures exchange further rebranded as the Coinbase Derivatives Exchange. The exchange has launched nano Bitcoin and Ethereum futures contracts both for retailers and the institutional market. It has also established a deep liquidity pool with $4.7bn BTC and $2.0bn ETH futures traded in notional volume so far in 2023.

According to the company, it filed an application with the NFA to register an FCM in September 2021. Since that time, Coinbase worked to ensure compliance with all the necessary regulations and bring its FCM’s business model in compliance with the CFTC’s customer protection requirements. One of the main NFA requirements for FCMs is to maintain adjusted net capital greater than or equal to the amount of required net capital.

The granted approval is very important for the firm, which is currently facing a legal action from the US Securities and Exchange Commission (SEC).

Nina Bobro

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Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.