Has the crypto market reached a significant milestone with the regulatory approval for crypto futures trading granted to Coinbase? This is a question many market observers have been pondering since the announcement of the landmark approval.
Unveiling a New Era in Crypto Trading
Almost two years after filing its application, the popular cryptocurrency exchange Coinbase has received approval from the National Futures Association (NFA) to operate as a Futures Commission Merchant (FCM). This breakthrough announcement came on August 16, marking a significant milestone for the crypto industry. The NFA, a self-regulatory organization, is recognized by the Commodity Futures Trading Commission (CFTC), the U.S. futures regulator.
With this approval, Coinbase becomes the first crypto exchange in the United States to offer regulated crypto futures, alongside traditional spot trading. This development is expected to open new opportunities for eligible customers in the U.S., who will soon be able to access crypto futures directly through Coinbase Financial Markets.
The Journey to Approval
It was back in September 2021 when Coinbase initially applied to register as an FCM with the NFA. The wait has been long, but the approval finally arrived, ushering in a new era for the crypto exchange.
In anticipation of this, Coinbase Derivatives Exchange had already launched new Bitcoin [BTC] and Ethereum [ETC] futures contracts in June, keeping institutional investors in mind. It also introduced its advanced “nano” Bitcoin and Ethereum contracts for derivatives products in June 2022.
It’s worth noting that the global crypto derivatives market represents approximately 75% of the total global crypto trading volume, making this move a significant stride for Coinbase and the crypto industry at large.
Overcoming Regulatory Hurdles
Despite the breakthrough, it’s been a challenging year for Coinbase. In June, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Coinbase, accusing it of operating as an unregistered exchange, broker, and clearing agency. Coinbase has since filed a motion to dismiss the regulator’s lawsuit, arguing that the SEC’s approach deviates significantly from existing legal frameworks.
Moreover, Coinbase’s Q2 earnings report revealed a fall in total revenue of 8% from the previous quarter, which the company attributed to “multi-year lows in crypto volatility.”
Yet, despite these hurdles, the approval for crypto futures trading signifies a positive step forward. For those interested in keeping a close eye on these developments, platforms like cryptoview.io provide comprehensive insights into the crypto market.
Stay updated with the latest trends in the crypto world with cryptoview.io.
