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<\/p>\nThe approval for America\u2019s largest digital asset exchange, Coinbase, to offer crypto futures to U.S. retail customers is being seen as a major regulatory victory amid a heated battle with the country\u2019s securities regulator.<\/p>\n
On Aug. 16, the National Futures Association (NFA) \u2014 designated by the U.S. commodities regulator as a registered futures association \u2014 granted Coinbase permission\u00a0to operate a Futures Commission Merchant (FCM) platform.<\/p>\n
Some crypto industry commentators see the approval as a significant regulatory victory for Coinbase and crypto, given thathe U.S. Securities and Exchange Commission has accused the exchange of avoiding the registration of its offerings.<\/p>\n
\u201cIf I were a judge I’d wonder why somehow [Coinbase] manages to register with the [CFTC] yet the [SEC] claims that Coinbase is unwilling to do the hard work to register,” investment management firm Electric Capital founder Avichal Garg wrote in an Aug. 17 tweet.<\/p>\n
Former CFTC Commissioner Brian Quintenz, thpolicy head at crypto investment firm a16z, said that \u201cCustomers and innovation can both win when a regulator is open to having a constructive dialogue around new technology.\u201d<\/p>\n
Meanwhile, Coinbase CEO Brian Armstrong said the approval was a major moment for crypto clarity in the United States. <\/p>\n
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The move has also placed Coinbase in a position normally helmed by traditional finance firms. <\/p>\n
Two institutional exchanges, the Chicago Mercantile Exchange and the Chicago Board Options Exchange, currently offer Bitcoin and Ether futures in the United States.\u00a0<\/p>\n
Coinbase labeled the move as a \u201ccritical milestone,\u201d adding it makes it the first crypto-native company to directly offer traditional spot crypto trading alongside futures products. <\/p>\n
In May, CoinGecko reported that the global crypto derivatives market was worth just under $3 trillion, while Coinbase highlighted that the global crypto derivatives market represents around three-quarters of all trading volumes. <\/p>\n
\u201cSince the global crypto derivatives market can be three to four times larger than spot, this approval increases Coinbase\u2019s total addressable market,\u201d Dan Dolev, an analyst at Mizuho Securities, wrote in an Aug. 16note, as reported by Barron\u2019s. <\/p>\n
Orca Capital’s Jeff Sekinger said \u201cCoinbase is set to become a pivotal access point for traders,\u201d adding that its new products will \u201ccater to this demand and provide enhanced exposure and flexibility for investors.\u201d<\/p>\n
CoinShares Chief Strategy Officer Meltem Demirors said it was \u201cexciting times in US crypto markets,\u201d particularly given a pivot toward U.S. trading hours. <\/p>\n