Crypto Derivatives Offered in U.S. after Coinbase Acquires FairX

They intend to bring regulated crypto derivatives to retail and institutional customers with this acquisition.
Crypto Derivatives Offered in U.S. after Coinbase Acquires FairX

In Brief:

  • The largest crypto exchange in the US announced the acquisition of FairX.
  • FairX is a CFTC-regulated Designated Contract Market (DCM) derivatives exchange.
  • The vision is to offer crypto derivatives to retail and institutional customers in the US.

The largest crypto exchange in the United States has announced the acquisition of FairX, a derivatives exchange, with hopes to offer derivatives trading to US consumers in the future.

“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 crypto economy for retail and institutional investors alike,” Coinbase said in a blog post Wednesday.

Only a few exchanges currently allow American investors to buy bitcoin and ether futures, with cash-settled contracts being the most popular and longest-available.

FairX is a Commodity Futures Trading Commission-regulated Designated Contract Market (DCM) derivatives exchange (CFTC). FairX has established brokerage ties with industry stalwarts TD Ameritrade and E*Trade, as well as 18 others, despite being relatively new to the market, having begun in May 2021.

Coinbase’s acquisition is the company’s next move toward developing the robust and comprehensive trading environment that investors want. They intend to bring regulated crypto derivatives to market with this acquisition, initially using FairX’s current partner ecosystem. 

Per the blog post, the deal “is subject to customary closing conditions and reviews, and is expected to close in Coinbase’s first fiscal quarter.” 

The goal is to eventually use FairX’s infrastructure to provide crypto derivatives to all Coinbase customers in the United States. The vision is to make the derivatives market more accessible to millions of retail clients by providing Coinbase’s industry leading, well-known user experience.

A strong, well-regulated derivatives market will be vital for long-term success as crypto grows as an asset class and the world’s most intelligent investors expand their trip into the crypto economy.Furthermore, Coinbase’s anticipated growth comes on the heels of FTX’s acquisition of Ledger X, a regulated crypto derivatives exchange based in the United States.

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