Coinbase, a prominent name in the cryptocurrency exchange arena, has achieved a significant milestone by obtaining regulatory clearance from the National Futures Association (NFA) to operate as a Futures Commission Merchant (FCM), according to an official press release. This development paves the way for eligible customers in the United States to soon gain direct access to cryptocurrency futures through Coinbase’s well-established platforms.
Having submitted its application to the NFA in September 2021, Coinbase has demonstrated a consistent commitment to aligning with stringent regulatory standards, thereby fostering a platform that prioritizes compliance and reliability for its user base. The company’s status as a publicly traded entity in the US further reinforces its dedication to a regulatory framework that prioritizes consumer protection.
The NFA’s approval, granted by the self-regulatory body authorized by the Commodity Futures Trading Commission (CFTC), comes nearly two years after Coinbase initiated its registration process as a futures merchant.
Cryptocurrency derivatives, constituting over 75% of the global cryptocurrency trading volume, had until now been inaccessible to US investors due to their intricate nature and associated risks. Derivatives function as financial instruments that allow traders to speculate on price movements without owning the underlying asset, such as a cryptocurrency token like Bitcoin.
Faryar Shirzad, Coinbase’s Chief Policy Officer, acknowledged the significance of this achievement, stating, “This is a significant milestone for bringing federal regulatory oversight over the crypto markets.” Operating under the supervision of both the CFTC and the NFA, Coinbase is poised to offer regulated futures trading in a manner that safeguards consumers’ interests and bolsters the US’s standing as a hub for digital innovation.
In a landscape where regulatory clarity is paramount, Coinbase’s accomplishment also underscores the growing influence of the CFTC as a relatively crypto-friendly regulatory authority, in contrast to certain other regulatory bodies.
This development aligns with Coinbase’s endeavor to continue contributing to the evolving crypto ecosystem while adhering to regulatory standards that balance innovation and consumer protection. It’s anticipated that the availability of crypto futures through Coinbase’s platform will not only expand investment opportunities for US customers but also shape the trajectory of the broader cryptocurrency market.