Coinbase Secures Milestone US Crypto Futures Approval

white flag with COINBASE written on it in blue color

In a significant development for the cryptocurrency industry, Coinbase (COIN), a prominent cryptocurrency exchange, has finally been granted permission to list cryptocurrency futures in the United States, marking a culmination of almost two years of regulatory efforts.

Coinbase Financial Markets, an arm of the exchange, has successfully obtained approval from the National Futures Association (NFA) to function as a Futures Commission Merchant (FCM), a pivotal role in the futures trading landscape. 

This news was officially disclosed on Wednesday, signifying a major step forward for Coinbase's business expansion and diversification.

Operating as an FCM empowers Coinbase to facilitate the buying and selling of futures contracts, similar to the role played by market makers in traditional financial markets. This move not only solidifies Coinbase's position in the crypto sphere but also opens up new avenues for traders and investors to engage with cryptocurrency futures within the regulated framework of the U.S. financial system.

National Futures Association (NFA) is a self-regulatory body authorized by the federal Commodity Futures Trading Commission (CFTC). The membership now allows Coinbase to operate under the NFA's oversight, ensuring compliance with trading regulations. The application process began in September 2021, and now Coinbase has successfully gained recognition from this important regulatory organization.

The regulatory concerns around the crypto companies in the United States have ramped up in the past months. Many major companies, including Coinbase, had to face enforcement actions from the Securities and Exchange Commission (SEC). 

Brian Armstrong, the CEO of Coinbase, a prominent U.S. cryptocurrency company, has voiced concerns over the possibility of more American crypto businesses relocating abroad due to what he perceives as an unwelcoming regulatory climate. In a candid statement, Armstrong highlighted the potential consequences of the current environment on the industry's future innovation.

Armstrong's remarks come as the SEC under the leadership of Chair Gary Gensler has adopted an "enforcement-first" strategy towards regulating the cryptocurrency space. While such an approach aims to ensure compliance and investor protection, critics argue that it could inadvertently stifle the vibrant culture of innovation that has become synonymous with the crypto sector.

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