Coinbase Financial Markets, Inc. has received approval from the National Futures Association (NFA), a self-regulatory organization designated by the Commodity Futures Trading Commission (CFTC), to operate as a Futures Commission Merchant (FCM). This approval allows Coinbase to introduce federally regulated cryptocurrency futures trading to eligible customers in the United States.
As a result of this approval, Coinbase Financial Markets becomes the first crypto-native company to offer US customers access to regulated, leveraged, and cash-settled crypto futures. Coinbase is expecting to foster confidence among individual customers and institutional players, while unlocking growth potential and broadening participation within the cryptocurrency market.
The journey towards this approval began in September 2021 when Coinbase Financial Markets submitted an application to the NFA to register as an FCM. Over the past years, the Coinbase team has worked closely with regulatory bodies to ensure full compliance with necessary regulations, as well as adherence to the CFTC’s stringent customer protection requirements.
This regulatory green light will allow eligible US customers to access regulated derivatives products through Coinbase Financial Markets, which is under the oversight of the CFTC and NFA.
According to Coinbase, The approval is poised to democratize access to the crypto economy within the United States, enabling a safe and secure environment for both traders and investors to engage with cryptocurrency derivatives. As the global crypto derivatives market accounts for approximately 75% of the worldwide crypto trading volume, the introduction of regulated futures trading through Coinbase Financial Markets is poised to contribute to the growth and maturity of the entire crypto ecosystem.
Coinbase’s strategic acquisition of FairX, now known as the Coinbase Derivatives Exchange, in 2022, further underscores its commitment to the regulatory framework. This CFTC-regulated futures exchange has already achieved milestones in the crypto derivatives space, launching nano Bitcoin and Ethereum futures contracts tailored for both retail and institutional investors. The Coinbase Derivatives Exchange, which is open to third-party brokers, FCMs, and market makers, has already established a substantial liquidity pool, with notable trading volume in BTC and ETH futures during 2023.
Disclaimer: The information provided in this fact-checked article is based on the announcement made by Coinbase Financial Markets, Inc. The content is for informational purposes only and does not constitute financial or investment advice. We made our best efforts to remove promotional tone and include necessary citations to support claims in the article.