Aug 16, 2023

Coinbase Financial Markets secured approval from the National Futures Association (NFA) to operate a Futures Commission Merchant (FCM), which means the crypto exchange can finally list crypto futures in the U.S. nearly two years after applying.

Video transcript

Coin based, that big old Cryptocurrency exchange finally want approval to list crypto futures in the US. Uh It's been about a two year effort and now they are able to list the type of products that lots and lots of people in the crypto space enjoy trading. I'm gonna toss this one to Wendy, Wendy. What do, what do you make of this? What's the signal here? What does this mean that coin base can now list uh crypto futures? I think that this is actually interesting just considering that they're still battling with the SEC. And I it's kind of a hard read for me again. I'm not a legal expert. I want to say that Jenna is our legal expert on the show, but I just think it's very bizarre that they got approved to do this when the SEC is currently currently going after them. And let's just say, for example, Doom and Gloom, what happens if the SEC goes after them and then finds all this additional stuff and completely destroys the business because that could actually happen. That's how court cases could go and this just means nothing. So I, I don't think that's gonna happen. But I just feel like it was a very interesting choice because I want to say that that was it the ETP that came out of Amsterdam yesterday that was backed by fidelity that operated in a similar manner as coin base is in the United States. But please correct me for any um inconsistencies. I will not do that because I don't know the source material that well, but I did want to point out riffing on your kind of sec thing that there is sort of the interesting jurisdictional battle in the US between these two regulators, the SEC and the CFTC, right? The CFTC is in charge of approving this particular product and the fact that they are involved in sort of again giving the green light at this time when it's sister agency, the SEC is really cracking down on coin base does, does strike me as interesting at the very least, but Jen probably knows the legal minutia and I'm gonna toss it to her. I don't, don't set me up for failure, Zach. Um I was going to say something similar to you, right. So Coinbase is saying that it's unlikely the SEC will take issue with this because it's going to be overseen by the N FA and the CFTC. I think this is interesting because earlier this month, Coinbase reported 1/6 consecutive quarter of losses, but we still have seen big, big coin based news, I think week after week, right. Yesterday, we talked about Coinbase officially launching in Canada. We had the launch of the layer two base. Now we have this product. I think what's going to be interesting to see is like if people are actually using these products, all of this is happening, they're trying to attract users while the SEC is suing. Um I just wonder like from a psychological level, how that is going to affect folks from actually coming over actually buying into these products, using them so that they can at the end of the day, maybe one day soon, eventually report something that is not a loss. They are a publicly traded company. I think that sometimes we forget that when we talk about all of these wonderful new products. But will, what do you think? Yeah, I think this is good news, right? Coinbase has many, many different product lines and they range from the simple things that we think of like token trading and you go all the way up to more complex financial instruments and back in 2019 and 2020 they were part of like the race uh to become a fully licensed crypto exchange, right? They have like a lot of licenses that they were turning through alongside other companies like fire blocks uh that were trying to get these as well, right? So for coin base to be able to step in and get this sort of license means that again, they are sort of a pack leader. They're one of the few out there that can uh be a part of this market and be a part of it as a crypto company first and not as a traditional financial company first. There's a lot of five parts to coin base, but at its core and going back to like the 2016 documents from Brian Armstrong who sort of laid out the plans, they want the world to be embraced by crypto and vice versa, right? Like we've been talking about build on base for the last month or so, the launch two, they the first exchange to really be pushing that narrative, but they're also building things in other sectors. So I just think all around is like a very savvy and strategic move. Who knows what happens with the SEC thing? I think Coinbase is strong enough to get through all of this. Like the worst case scenario is like a pretty hefty fine, but we've seen lots of companies be fine by SEC and keep moving along and coin base seems to have a big enough war chest and strategy team to be able to move past that even in the case of a bad situation there. But I'm pretty bullish on the whole company, Zach. Uh Yeah, no good, good summary. Interesting to see them, you know, diversify, diversify the product suite and uh yeah, futures and options really remain a big part of the trading mix. In crypto and certainly in the world of traditional, uh traditional markets. So again, getting that product line out there is certainly, uh, of note, uh, Wendy, what do you think? Um, my only comment I want to make is isn't this really gonna just benefit the accredited investors over the average retail for like options trading and stuff like that? But I guess, yeah, like they're gonna get, yeah, they're still gonna get the better deals and be able to do the futures and we're just gonna kind of be here as poor clubs. I feel like, I guess that would be like, kind of there no matter what though, we can all take our test together. What is it like the series? Something, something, something we could all take that together, become financial advisor. That, that would be a journey that would be fun. Or we could just, like, make services or we could just make, like, a gazillion dollars and like, or be born into money and then, you know, and be stupid and just get access to all this stuff because we're rich. I would do that. I like Will's idea the next iteration of the hash show. If, if this show ever goes off the air, that's what we'll do next. Interesting. Ok. All right.

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