On August 16, 2023, crypto exchange Coinbase Global announced in a blog that its subsidiary Coinbase Financial Markets, Inc. received approval from the National Futures Association (NFA), a self-regulatory organization (SRO) for the US derivatives industry, to operate as a futures commission merchant (FCM) and offer eligible US customers access to crypto futures contracts on its platforms. The approval permits Coinbase to offer access to regulated, leveraged, and cash-settled crypto futures. Coinbase originally filed its application with the NFA in 2021.

Coinbase indicated in its announcement that it worked with regulators to ensure it could comply with necessary regulations and that its business model meets the CFTC’s customer protection requirements. With the NFA approval, Coinbase customers can access regulated derivatives products, such as Bitcoin and Ether futures, through crypto exchange Coinbase Financial Markets, subject to the oversight of the CFTC and the NFA.

Coinbase is currently subject to an SEC enforcement action for its alleged failure to register as a national securities exchange, broker-dealer, and clearing agency. The SEC also charged Coinbase with failing to register the offer and sale of its crypto asset staking-as-a-service program called Coinbase Earn. For more information, see Legal Update, SEC Charges Crypto Exchange Coinbase with Registration Failures.

Note that in its August 3, 2023 quarterly shareholder letter, Coinbase indicated that in May 2023 it expanded access to its offshore derivatives exchange for customers outside the US. The exchange has received approval from the Bermuda Monetary Authority, allowing institutional clients in eligible jurisdictions outside the United States, United Kingdom, and some European Union jurisdictions to trade perpetual futures, which made up 75% of global crypto trading volume in 2022.