Coinbase gets regulatory approval to offer crypto futures in the U.S.

• Coinbase applied for the approval nearly two years ago.
• COIN has been struggling to trade above the $80-price mark for the last one day.

Cryptocurrency exchange Coinbase [COIN] has secured the approval from the National Futures Association (NFA) to operate a Futures Commission Merchant (FCM), the exchange announced on 16 August.

The NFA is a self-regulatory organization designated by the Commodity Futures Trading Commission (CFTC), the U.S. futures regulator.

Coinbase can now offer crypto futures to eligible customers in the U.S. It is the first crypto exchange in the country to offer regulated crypto futures, in addition to traditional spot trading, as per the press statement.

The exchange announced that its customers can soon directly access crypto futures through Coinbase Financial Markets.

Coinbase applied to register as an FCM with the NFA in September 2021. After waiting for nearly two years, it has finally received the approval.

Keeping institutional investors in mind, Coinbase Derivatives Exchange launched its new Bitcoin [BTC] and Ethereum [ETC] futures contracts in June. The derivatives exchange had launched its “nano” Bitcoin and Ethereum contracts for advanced derivatives products in June 2022.

The global crypto derivatives market accounts for around 75% of global crypto trading volume, the press statement notes.

Greg Tusar, Coinbase’s Head of Institutional Product, said,

“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.”

Regulatory scrutiny, falling revenue – a troublesome year for Coinbase so far

In June, the U.S. Securities and Exchange Commission (SEC) sued Coinbase for allegedly operating as an unregistered exchange, broker and clearing agency. The exchange later filed a motion to dismiss the regulator’s lawsuit. It claimed that the SEC’s approach significantly deviates from existing legal frameworks.

Early this month, Coinbase released its Q2 earnings report. The company reported total revenue of $708 million, a fall of 8% from the previous quarter. It attributed the fall in transaction revenues to “multi-year lows in crypto volatility.”

For the last one day, COIN has been struggling to trade above the $80-price mark. Its price has continued to plummet.

Source: COIN, Nasdaq