Coinbase Gains Approval to Offer Crypto Futures to US Retail Clients

On Wednesday, Coinbase Global announced that it has received the green light to provide cryptocurrency futures to U.S. individual customers. This significant regulatory advancement comes amid an ongoing lawsuit with the Securities and Exchange Commission (SEC).

The approval enables Coinbase to directly present bitcoin and ether futures to qualified U.S. retail customers, a privilege previously limited to its institutional clientele.

Following the endorsement from the National Futures Association (NFA) – a self-regulating entity appointed by the Commodity Futures Trading Commission (CFTC) – Coinbase’s stock value rose by 3%, settling at $81.55.

Coinbase celebrated the approval, stating, “This crucial landmark underscores our dedication to conducting a regulated and compliant operation.”

Despite this positive development, Coinbase maintains a contentious relationship with the SEC. In a lawsuit filed in June, the SEC claimed that Coinbase was conducting its operations unlawfully due to its failure to register as an exchange.

Brian Armstrong, Coinbase’s CEO, has expressed concerns regarding the U.S. regulatory landscape for crypto businesses. He suggested that the unfriendly regulatory conditions might push more crypto companies to relocate overseas. Additionally, he pointed out that SEC Chair Gary Gensler’s aggressive regulatory stance might hinder industry innovation.

The NFA’s approval, which comes nearly two years post Coinbase’s initial application, might pave the way for the company to tap into a relatively unexplored market sector.

Leveraged derivatives like futures play a significant role in the global crypto market, representing nearly 80% of the entire crypto market . Such products often contribute to market volatility. As of July, the worldwide trading volume for crypto derivatives was estimated at approximately $1.85 trillion, as per research by CCData.