Coinbase Files to Offer Futures and Derivatives Trading

Coinbase Takes the First Step to Enter Crypto Futures

On Sept. 16, U.S.-based crypto platform Coinbase filed an application with the country's top derivatives self-regulatory organization (SRO) to become a registered Futures Commission Merchant (FCM) with the National Futures Association (NFA).

Announcing on Twitter, Coinbase said, “This is the next step to broaden our offerings and offer futures and derivatives trading on our platforms, ” to further and grow the crypto economy.

The NFA’s website now lists Coinbase Global Inc. membership application status as pending. Once Coinbase gets approved by the NFA, the company would then need to register with the Commodity Futures Trading Commission (CFTC). The platform would then need to file an application for a specific product or fund with the Securities and Exchange Commission.

The CFTC is a regulatory independent agency tasked with the regulation of the U.S. derivatives markets, which includes futures, swaps, and certain kinds of options. Moreover, the NFA is a self-regulatory organization that has been designated by the CFTC as a registered futures association.

Meanwhile, FCM is defined as an organization involved in the acceptance of buy or sell orders for futures or options in exchange for payment of money or other assets from clients.

Trading Crypto Derivatives in the U.S.

Many U.S.-based cryptocurrency exchanges have stayed away from offering derivatives and futures trading due to regulatory uncertainty. Other global crypto exchanges to offer include Binance, OKEx, FTX, even though some U.S.-based companies CME Group Inc. and Kraken also offer them, although Kraken only offers the products to non-U.S. users.

The derivatives market posted transactions worth more than $143 billion in the past 24 hours, based on CoinGecko. Binance is the top platform for crypto derivatives trading with $10.1 billion in 24-hour open interest followed by FTX at $6.8 billion then Bybit at $3.8 billion.