Coinbase Clears Regulatory Hurdle for Derivatives Business

Coinbase has secured approval from the Commodity Futures Trading Commission (CFTC) to launch its own US-based derivatives clearing organization, Coinbase Clearing LLC. This move follows in the footsteps of Kraken's parent company Payward, which acquired Bitnomial and its CFTC-regulated exchange, clearinghouse, and brokerage in May. With this approval, Coinbase gains control over another key part of its derivatives business.

According to Molly Abraham, Coinbase's general counsel, 'Today's CFTC approval completes Coinbase's end-to-end derivatives infrastructure, enabling us to bring more regulated derivatives products to market with native USDC collateral and 24/7 settlement.'

The registration allows Coinbase Clearing LLC to clear fully collateralized futures, options on futures, and swaps, but does not permit the clearinghouse to clear leveraged products. This marks another step in Coinbase's expansion from a crypto trading platform into a provider of financial market infrastructure.