Crypto exchange Coinbase is purchasing FairX, a U.S.-based derivatives platform.
The move could open the door for Coinbase to offer crypto derivatives products in the U.S. At present, only a handful of exchanges allow U.S. investors to trade bitcoin and ether futures, with cash-settled products being both the most popular and the longest-available products. FTX.US acquired LedgerX last August with a similar aim.
Crypto.com, which recently launched an ad campaign starring Matt Damon that airs in movie theaters and football games, also acquired retail derivatives platform Nadex late last year.
“The development of a transparent derivatives market is a critical inflection point for any asset class and we believe it will unlock further participation in the cryptoeconomy for retail and institutional investors alike,” Coinbase said in a blog post Wednesday.
FairX is a designated contract market (DCM) registered with the Commodity Futures Trading Commission (CFTC), meaning it is allowed to offer futures products in the U.S.
Coinbase is also an applicant to the National Futures Association, a self-regulatory organization overseeing derivatives platforms in the U.S.
FairX is a relatively young futures platform that launched its exchange in May 2021 after receiving regulatory approvals in late 2020. However, FairX has relationships with major brokerages including TD Ameritrade, E*Trade, ABN AMRO, Wedbush, Virtu Financial and a handful of others, which offered FairX’s futures products or provided clearing services, according to the company’s announcement at the time.
UPDATE (Jan. 12, 2022, 22:50 UTC): Adds that Crypto.com also acquired a derivatives platform.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.