Coinbase received approval from the Commodity Futures Trading Commission (CFTC) to launch Coinbase Clearing LLC — its own U.S. derivatives clearing organization.
Registration took effect on Monday, allowing the clearing organization to service fully collateralized futures, options on futures, and swaps, but it does not allow it to service leveraged products.
“Today’s CFTC approval completes the creation of Coinbase’s own derivatives infrastructure and allows us to bring more regulated derivatives products with native collateral in USDC and 24/7 settlement to the market,” said Coinbase Chief Legal Officer Molly Abraham.
The approval transfers to Coinbase control over another key part of its derivatives business—along with the already existing futures broker, Coinbase Financial Markets Inc., and the exchange Coinbase Derivatives LLC. This is also another step in Coinbase’s expansion from a cryptocurrency trading platform into a provider of financial market infrastructure.
The derivatives clearing organization acts as an intermediary between the buyer and the seller in a derivatives transaction and helps manage settlement and counterparty risk, including if one of the parties fails to meet its obligations. Through its derivatives exchange, Coinbase offers regulated U.S. futures tied to cryptocurrencies such as bitcoin and ether, as well as commodity futures and stock index futures. The company also provides long-term crypto futures in perpetual format.
Other cryptocurrency companies have also moved derivatives infrastructure in the U.S. under their own control. Parent company Kraken Payward completed the acquisition of Bitnomial in May, obtaining a regulated CFTC exchange, clearing organization, and futures broker.