Crypto exchange Coinbase has received the green light from the National Futures Association (NFA) to offer crypto futures to eligible customers in the US.
The company’s subsidiary, Coinbase Financial Markets Inc., will operate as a futures commission merchant (FCM) and offer access to crypto futures from its platforms.
The approval, described as a “critical milestone” by Greg Tusar, Coinbase’s vice president of institutional product, allows the exchange to directly offer traditional spot crypto trading alongside regulated and leveraged crypto futures for verified customers.
Tusar also emphasized that the global crypto derivatives market accounts for roughly 75% of crypto trading volume worldwide, making it a vital access point for traders.
Coinbase’s move into the futures market began with the acquisition of FairX, now known as the Coinbase Derivatives Exchange, last year. The exchange has established a deep liquidity pool with $4.7 billion worth of BTC and $2 billion worth of ETH futures traded in notional volume this year.
The latest regulatory approval follows the launch of new bitcoin and ether futures contracts aimed at institutional clients in June. Last year, the derivatives exchange introduced its “nano” bitcoin and ether contracts in response to institutional demand for advanced derivatives products.
“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.”
Greg Tusar, Coinbase’s vice president of institutional product
The exchange also plans to allow customers to access futures through Coinbase Financial Markets directly.
Coinbase’s legal challenges
However, it’s worth noting that Coinbase is currently facing legal challenges in the US, with the Securities and Exchange Commission (SEC) suing the company for allegedly operating as an unregistered exchange, broker, and clearing agency.
The case is ongoing, with support for Coinbase from firms like Andreessen Horowitz and Paradigm, who filed a joint amicus brief.
In late June, Coinbase lodged a motion to dismiss the lawsuit, asserting that the SEC’s method notably diverges from current legal standards.
