Coinbase acquires FairX to offer crypto derivatives trading in the US

Leading crypto exchange Coinbase announced the acquisition of FairX, a derivatives exchange regulated by the Commodity Futures Trading Commission (CFTC). The following acquisition will enable Coinbase to enter and explore the derivative trading market. 

Coinbase acquires derivatives exchange FairX

In an announcement made on January 13th, the crypto exchange referred to the acquisition as “a key stepping stone on Coinbase’s path to offer crypto derivatives to retail and institutional customers in the US”

.@coinbase ? @thefairxchange

This acquisition marks a key stepping stone on Coinbase’s path to offer crypto derivatives to both retail and @CoinbaseInsto customers.

?…

— Coinbase (@coinbase) January 12, 2022

The following acquisition will enable Coinbase to actively explore the derivatives trading market in partnership with FairX and will also permit its users to access the crypto derivatives in a “robust and holistic trading environment.”

A derivatives trading can be referred to as a form of trading that enables the trader to speculate on the future price of the asset via buying it by selling a derivatives contract to secure enhanced gains when compared with buying the underlying asset.

The announcement further stated that through this acquisition, Coinbase is planning to “bring regulated crypto derivatives to market, initially through FairX’s existing partner ecosystem.” 

As per the blog post, Coinbase addressed FairX as an organization that brings “a world-class team with deep expertise across product development, market structure, and compliance to Coinbase.”

Launched in 2021, FairX is a Designated Contract Market (DCM), which is regulated by the CFTC. The company has secured deals with prominent brokerage organizations such as TD Ameritrade, E*Trade, Virtu Financial, ABN AMRO, and others.

The announcement also stated Coinbase’s plan to “leverage FairX’s infrastructure to offer crypto derivatives to all Coinbase customers in the US.” The crypto exchange also said that it wants to make the derivatives market more “approachable” to its millions of retail customers by offering an easy-to-use user experience.  

As per the blog post, the acquisition is set to close in Coinbase’s first fiscal year after being subjected to customary closing conditions and reviews.