Coinbase, the largest cryptocurrency exchange in the United States, recently received approval to offer crypto derivates.
This gives investors a regulated, US-based platform to conduct some of the most popular trades in the crypto market.
The approval strongly indicates US regulators recognizing the importance of bringing the crypto market under their oversight, and enable firms to offer a wide range of products in a more transparent way.
“This is the first crypto-first platform to offer regulated and leveraged crypto futures alongside traditional spot trading (in the U.S.),” explained Aaron Arnold of Altcoin Daily.
“The way Americans have dealt with this before, right or wrong, is they could download a VPN and say they’re somewhere else and… trade on some of the top leverage exchanges in the world, or they could drive up to Canada or Mexico and do it, too,” Arnold added.
Coinbase’s approval was granted through the Commodity Futures Trading Commission (CFTC) despite it facing a lawsuit from the U.S. Securities and Exchange Commission (SEC).
The exchange is further expected to become a partner in BlackRock’s spot bitcoin exchange-traded fun (ETF) if it is approved by the SEC.
“Are there mixed signals? Because this decision was approved by a subsidiary of the CFTC, (Coinbase) is getting sued by the SEC, also BlackRock has them down to help custody the spot bitcoin ETF if and when that gets approved,” Arnold added.
Coinbase is facing hindrances in the wake of the massive fraud revelations around bankrupted cryptocurrency exchange, FTX. This has also posed questions about the risks of crypto trading.
“This is why unregulated exchanges like FTX international had so many users, because they offered financial products that the U.S. simply was not allowed to offer,” said Arnold. “This is a huge win for Americans. The fear was they would be farther and farther left behind.”