By Greg Tusar, VP, Institutional Product for Coinbase

• Coinbase Financial Markets, Inc. has secured regulatory approval from the National Futures Association (NFA), a CFTC-designated self-regulatory organization, to operate a Futures Commission Merchant (FCM) and offer eligible US customers access to crypto futures from our platforms.
• This is a critical milestone that reaffirms our commitment to operate a regulated and compliant business and be the most trusted and secure crypto-native platform for our customers.
• Coinbase will now be the first crypto-native leader to directly offer traditional spot crypto trading alongside regulated and leveraged crypto futures, on an integrated trading solution for our verified customers. Learn more about futures here.

Coinbase customers will soon be able to directly access futures through Coinbase Financial Markets 

At Coinbase, we believe regulation and transparency are critical and build confidence for individual customers and institutions. Access to a CFTC-regulated crypto derivatives market is essential to unlocking significant growth and enabling broader participation in the cryptoeconomy.

In September of 2021, we filed an application with the NFA to register an FCM. Our team has worked with regulators since then to ensure we will comply with all the necessary regulations and that our FCM’s business model meets the CFTC’s customer protection requirements.

Coinbase chose to become a public company in the US because we believe the US would best be served by embracing the cryptoeconomy and would offer the regulatory framework with the highest standards in consumer protection.

We believe this is a watershed moment to be able to bring regulated crypto products to US customers. Where regulations are clear and sensible, we will work with regulators to receive the authorizations needed to offer products that align with our purpose of using crypto to update the financial system to advance economic freedom and opportunity. We support this purpose by building the most trusted and secure products and services.

Today, we are pleased to announce that approval has been secured, which will allow eligible US customers to access regulated derivatives products through Coinbase Financial Markets and alongside our spot market for a seamless experience subject to the oversight of the CFTC and the NFA. Approval for US customers to access regulated crypto derivatives will allow more people to access the cryptoeconomy in the United States in a safe way that helps keep the US at the center of digital innovation.

An important milestone

The global crypto derivatives market represents ~75% of crypto trading volume worldwide and is a critical trader access point. The ability to trade using margin gives customers leverage and access to the crypto market with less upfront investment than traditional spot trading. Being able to express long and short positions, investors also use derivatives to manage risk on their underlying crypto assets.

Such product benefits are why we acquired FairX in 2022, a CFTC-regulated futures exchange now known as the Coinbase Derivatives Exchange. Since then, the exchange has successfully launched nano Bitcoin and Ethereum futures contracts, sized for the retail investor, and on June 5, launched larger versions for the institutional market.

The Coinbase Derivatives Exchange is open to third-party brokers, FCMs, and market makers. It has established a deep liquidity pool with $4.7bn BTC and $2.0bn ETH futures traded in notional volume so far in 2023. Obtaining FCM approval was our next step in bringing these transparent and secure markets to our customers so they can access regulated futures contracts alongside our liquid spot market.

In the coming months, we’ll provide additional information on how our verified US customers can access our futures offering.

To learn more about futures, click here.