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- 1 After two years of dedicated regulatory work, Coinbase finally got the green signal for crypto futures trading in the US.
- 2 The official announcement was made on August 16th, 2023.
A major step forward for the cryptocurrency sector took place as Coinbase (COIN), a well-known cryptocurrency exchange, has received approval to introduce cryptocurrency futures trading within the United States. This achievement comes after nearly two years of dedicated regulatory work.
The National Futures Association (NFA) has granted approval to Coinbase Financial Markets, a division of the exchange, to operate as a Futures Commission Merchant (FCM), a crucial role in the field of futures trading.
The official announcement of this development took place on Wednesday, August 16th, marking a significant stride for Coinbase’s efforts in expanding and diversifying its business.
Functioning as an FCM enables Coinbase to oversee the trading of futures contracts, akin to the role fulfilled by market makers in conventional financial markets. This decision not only strengthens Coinbase’s standing in the cryptocurrency realm but also introduces fresh opportunities for traders and investors to participate in regulated cryptocurrency futures trading within the U.S. financial system.
The National Futures Association (NFA) is a self-regulatory entity authorized by the federal Commodity Futures Trading Commission (CFTC). By becoming a member, Coinbase is now subjected to NFA supervision, guaranteeing adherence to trading rules. The application procedure commenced in September 2021, culminating in Coinbase’s successful acknowledgement by this significant regulatory body.
SEC Ramped Up Enforcement Caught Coinbase
In recent months, regulatory scrutiny over cryptocurrency companies in the United States has intensified. Notably, several prominent companies, Coinbase included, have encountered enforcement actions initiated by the Securities and Exchange Commission (SEC).
In June 2023, the SEC charged Coinbase for offering unregistered securities. The agency stated that the trading platform did not register with the regulator for the cryptocurrencies sales and offerings under the staking as a service program of the company.
Brian Armstrong, the CEO of Coinbase, a notable cryptocurrency company based in the U.S., has expressed worry about the potential for additional American crypto firms to move their operations overseas due to what he views as an unfavorable regulatory atmosphere.
In an open statement, Armstrong pointed out the potential impact of the present conditions on the industry’s ability to innovate in the future. His comments coincide with the SEC embracing an “enforcement-first” approach in regulating the cryptocurrency domain.
Although this tactic aims to guarantee adherence to regulations and safeguard investors, skeptics contend that it might unintentionally hinder the dynamic culture of innovation that has become closely associated with the cryptocurrency industry.
COIN stock price initially took a slight up move during the intraday trading session on the day of announcement, and closed at $79.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
