- Coinbase is acquiring a MiFID II license for EU derivatives.
- The crypto company aims for regulatory compliance, transparency, and anti-money laundering.
- Coinbase is planning to expand global access to derivatives and financial inclusivity.
Coinbase is gearing up to introduce cryptocurrency-related derivatives in the European Union by acquiring a firm that holds a MiFID II license. This move, as disclosed to CNBC, involves the U.S.-based digital currency exchange entering into an agreement to purchase a holding company that possesses the necessary authorization.
The MiFID II regulation, updated by the EU in 2017, sets forth revised standards for financial instruments to broaden the scope beyond equities and encompass various asset classes, including derivatives, fixed income, and currencies.
Coinbase has been pursuing the goal of catering to professional and institutional clients as part of its long-term strategy. Established 12 years ago, the firm has been actively expanding its services to cater to institutional entities like hedge funds and high-frequency trading firms, aiming to capitalize on the larger transaction volumes characteristic of these traders. The successful completion of this acquisition would signify Coinbase’s inaugural foray into offering derivatives trading within the European Union.
Possessing a MiFID II license will enable Coinbase to initiate the provision of regulated derivatives, including futures and options, within the EU, complementing its existing services of spot trading in bitcoin and other cryptocurrencies. The completion of this acquisition is pending regulatory consent, with Coinbase anticipating a closure later in 2024.
In a blog post shared exclusively with CNBC on Friday, Coinbase expressed that this license will facilitate the expansion of their derivatives offerings, permitting them to serve eligible European customers in specific EU nations.
“As the industry leader in trusted, compliant products and services, we aim for the highest standards for regulatory compliance, and before operationalizing any license or serving any users, this entity must achieve our Five-point Global Compliance Standard.”
Coinbase
Coinbase has expressed its commitment to adhering to the strict compliance standards enforced in the EU, which include measures for combating money laundering, ensuring customer transparency, and adhering to sanctions. The firm is devoted to maintaining a comprehensive five-point global compliance framework, supported by a team of over 400 professionals with backgrounds in organizations such as the FBI and the Department of Justice.
While acknowledging the extensive work ahead in finalizing the acquisition and operationalizing the EU MiFID licensed entity, Coinbase regards this as a significant stride in its mission to broaden the reach of its international derivatives offerings and contribute to a more inclusive and global financial system that serves 1 billion people worldwide. This commitment and future vision were outlined in its blog post.
