Nearly two years after submitting an application for authorization, cryptocurrency exchange Coinbase (COIN) is now able to list crypto futures in the United States.
The National Futures Association (NFA) has granted Coinbase Financial Markets permission to operate as a Futures Commission Merchant (FCM), the company announced on Wednesday. FCMs play a similar role to market makers in that they buy and sell futures contracts.
With approval from the federal derivatives regulator, the Commodity Futures Trading Commission (CFTC), the NFA is a self-regulatory body. In September 2021, Coinbase made its initial application to the NFA.
Upon receiving clearance, Coinbase will become the first cryptocurrency-focused platform in the United States to provide regulated and leveraged crypto futures in addition to conventional spot trading, the company said in a statement.
According to Andrew Sears, CEO of Coinbase Financial Markets, “providing US investors with access to safe and regulated crypto futures is key to unlocking growth and enabling broader participation in the crypto economy.”
In June, the CFTC granted permission to Cboe Digital, the cryptocurrency division of Cboe Global Markets, to issue margined contracts for bitcoin and ether futures.
In order to safeguard clients, I have been outspoken about the advantages of integrating acceptable crypto activity into the regulated arena, but in a way that supports monitoring, accountability, transparency, and risk management, said CFTC Commissioner Christy Goldsmith Romero at the time. At $83.20 in pre-market trade, COIN shares are up more than 5% on the Nasdaq.