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Coinbase’s path to creating a robust and regulated crypto derivatives market

  • Coinbase is acquiring FairX, a CFTC-regulated derivatives exchange
  • The acquisition is a key stepping stone on Coinbase’s path to offer crypto derivatives to retail and institutional customers in the US
  • This is an important step toward Coinbase ultimately making the derivatives market accessible to our millions of customers through an industry-leading, simplified user experience

Coinbase is committed to providing our retail and institutional customers with the most trusted and complete suite of trading tools to access the cryptoeconomy. As crypto matures as an asset class and the world’s most sophisticated investors deepen their journey into the cryptoeconomy, a healthy, well-regulated derivatives market will be critical for long-term success.

Today, we’re announcing the acquisition of FairX, a CFTC-regulated derivatives exchange or Designated Contract Market, which represents our next step toward creating the robust and holistic trading environment investors are seeking. Through this acquisition, we plan to bring regulated crypto derivatives to market, initially through FairX’s existing partner ecosystem. Over time, we plan to leverage FairX’s infrastructure to offer crypto derivatives to all Coinbase customers in the US. We want to make the derivatives market more approachable for our millions of retail customers by delivering an easy-to-use user experience that Coinbase is known for.

Deep and liquid derivatives markets are essential to the functioning of traditional capital markets. These products are in high demand from investors who seek to effectively manage risk, execute complex trading strategies, and gain exposure to crypto outside of existing spot markets. The development of a transparent derivatives market is a critical inflection point for any asset class and we believe it will unlock further participation in the cryptoeconomy for retail and institutional investors alike.

FairX brings a world-class team with deep expertise across product development, market structure, and compliance to Coinbase. Its market-leading exchange technology and proven ability to deliver listed futures in a straightforward, easy-to-understand structure, aligns with Coinbase’s commitment to creating a more fair, accessible, efficient, and transparent financial system enabled by crypto.

The acquisition is subject to customary closing conditions and reviews, and is expected to close in Coinbase’s first fiscal quarter. FairX will operate normally during this period. We look forward to sharing more updates as they become available.

Coinbase’s path to creating a robust and regulated crypto derivatives market was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.