Coinbase Gets Green Light to Offer Crypto Futures Trading

Coinbase has scored a regulatory victory by getting permission to offer crypto futures trading.

That approval, announced Wednesday (Aug. 16), came from the National Futures Association, a self-regulatory agency backed by the Commodity Futures Trading Commission (CFTC) and comes as Coinbase continues to battle U.S. financial regulators.

“This is a critical milestone that reaffirms our commitment to operate a regulated and compliant business and be the most trusted and secure crypto-native platform for our customers,” the company said on its blog.

It adds that the approval makes Coinbase the first crypto-native lender to directly offer traditional spot crypto trading as well as regulated and leveraged crypto futures, “on an integrated trading solution for our verified customers.”

Coinbase, the largest cryptocurrency exchange in the U.S., has been engaged in a legal battle with the SEC for years. The fight culminated in a lawsuit filed in June, in which the SEC accused the company of making “billions of dollars unlawfully facilitating the buying and selling of crypto asset securities” since 2019.

Coinbase, through its general counsel Paul Grewal, shot back with criticism of the SEC’s “reliance on an enforcement-only approach in the absence of clear rules for the digital asset industry.”

Meanwhile, Coinbase has filed a counterclaim against the SEC, and has sought to have the case dismissed, recently winning the support of crypto industry lobbyists and Sen. Cynthia Lummis, R-Wyo., co-author of the Senate’s crypto legislation.

As it faces stepped up scrutiny in the U.S, Coinbase has looked to other countries to expand its business, including its launch this week in Canada

Coinbase considers Canada a high-priority region, due to the strong interest among the populace in cryptocurrencies. In announcing its new Canadian business, the company cited an Ontario Securities Commission survey showing that more than 30% of Canadians intend to buy cryptocurrency within the year, more than double the amount that own crypto assets.

“This presents a significant opportunity for growth in the Canadian market,” Coinbase said.

In May, the company used its license from the Bermuda Monetary Authority to roll out the Coinbase International Exchange, which lets institutional users based in eligible jurisdictions outside of the U.S. trade perpetual futures. 

According to Coinbase, futures accounted for nearly 75% of worldwide crypto trading volume last year. It’s why the company believes Wednesday’s announcement is so momentous.

“Where regulations are clear and sensible, we will work with regulators to receive the authorizations needed to offer products that align with our purpose of using crypto to update the financial system to advance economic freedom and opportunity,” Coinbase said.