Coinbase gets CFTC approval for US derivatives clearinghouse

Coinbase joins Kraken in bringing US derivatives infrastructure in-house, after Kraken’s parent acquired Bitnomial and its CFTC-regulated exchange, clearinghouse and brokerage in May.

Coinbase has received approval from the Commodity Futures Trading Commission (CFTC) to launch Coinbase Clearing LLC, its own US-based derivatives clearing organization. 

The registration became effective Monday, permitting the clearinghouse to clear fully collateralized futures, options on futures and swaps, though the registration does not permit the clearinghouse to clear its leveraged products. 

“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,” said Molly Abraham, Coinbase’s general counsel.

The approval gives Coinbase control over another key part of its derivatives business, alongside its existing futures broker, Coinbase Financial Markets Inc., and exchange, Coinbase Derivatives LLC. It also marks another step in Coinbase’s expansion from a crypto trading platform into a provider of financial market infrastructure. 

A derivatives clearing organization stands between the buyer and seller in a derivatives trade, and helps manage settlement and counterparty risk, including if one party defaults. Through its derivatives exchange, Coinbase lists US-regulated futures tied to cryptocurrencies such as Bitcoin and Ether, alongside commodity and equity-index futures. It also provides long-dated perpetual-style crypto futures. 

Other crypto companies have also moved to bring US derivatives infrastructure in-house. Kraken parent Payward completed its acquisition of Bitnomial in May, gaining a CFTC-regulated exchange, clearinghouse and futures brokerage.

Related: Kalshi joins Coinbase with own filing for US stock perpetual futures