Cryptocurrency exchange Coinbase (COIN) can now list crypto futures in the U.S. through Coinbase Financial Markets, nearly two years after applying for approval.
Coinbase Financial Markets secured approval from the National Futures Association (NFA) to operate a Futures Commission Merchant (FCM), according to an announcement on Wednesday. The role of FCMs is to buy or sell futures contracts, similar to that of a market maker.
The NFA is a self-regulatory organization with designation from federal derivatives regulator the Commodity Futures Trading Commission (CFTC). Coinbase first applied to join the NFA in September 2021.
The approval makes Coinbase the first crypto-focussed platform in the U.S. to offer regulated and leveraged crypto futures alongside traditional spot trading, according to its announcement.
"Offering US investors access to secure and regulated crypto futures is key to unlocking growth and enabling broader participation in the crypto economy," Andrew Sears, CEO, Coinbase Financial Markets, said.
The crypto unit of the Cboe Global Markets, Cboe Digital, received approval from the CFTC to offer margined bitcoin and ether futures contracts in June.
“I have been vocal about the benefits of bringing appropriate crypto activities into the regulated space in order to protect customers, but in a way that supports oversight, accountability, transparency, and risk management,” CFTC Commissioner Christy Goldsmith Romero said at the time.
COIN shares on the Nasdaq opened up over 4% at $82.49. At the time of writing, they were trading at around $81.60, up about 3%.
UPDATE (Aug. 16, 11:10 UTC): Adds info on role of FCMs and background of Cboe's CFTC approval.
UPDATE (Aug. 16, 11:50 UTC): Adds quote from Andrew Sears.
UPDATE (Aug. 16, 13:45 UTC): Updates COIN share price#
UPDATE (Aug. 22, 12:55 UTC): Adds "Coinbase Financial Markets, Inc" to first paragraph
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