Coinbase, North America’s largest cryptocurrency exchange, has taken the first steps toward submitting an application to allow futures and derivatives on its platform.
Coinbase said on September 16 that it had applied to the National Futures Association (NFA) to become a Futures Commission Merchant (FCM). In order to further extend the crypto economy, the exchange noted that “this is the next step to diversify our products and offer futures and derivatives trading on our platforms.”
Coinbase Global Inc.’s membership application is currently listed as pending on the NFA’s official website. If this proposal is granted, the corporation will be required to register with the Commodity Futures Trading Commission (CFTC). Coinbase would next need to file an application with the Securities and Exchange Commission for a specific product or fund.
The NFA is a self-regulatory organization for the US derivatives market that has been approved as a registered futures association by the CFTC. An FCM is described as a company that accepts buy or sell orders for futures or options in return for money or other assets from clients.
The continuous conflict
Coinbase is currently embroiled in a legal dispute with the Securities and Exchange Commission over its Lend program, which offers a 4% annual return on USDC deposits for US consumers. The product infuriated the financial regulator, who said it violated securities regulations.
On September 8, Coinbase CEO Brian Armstrong turned to Twitter to query the lack of regulatory clarity and to wonder why the regulator has threatened to prosecute it when other sites are already offering stable coin dividends.
Mark Cuban, a wealthy investor, and entrepreneur asked Coinbase to “go on the offensive” with the SEC and battle them to prevent further strangling of innovation in the crypto business.
Coinbase announced a $1.5 billion private fundraising initiative from the sale of senior notes, also known as “junk bonds,” on September 13th, according to BeInCrypto.
The SEC is dragging its feet on this issue.
The SEC has yet to approve any crypto-related exchange-traded product (ETP), despite a growing number of applications. So far, more than 20 have been filed, but the procrastination continues.
Fidelity Investments executives conducted a private meeting with SEC regulators earlier this month, laying out various reasons why an ETP should be permitted.
The SEC has rescheduled the decision on VanEck’s Bitcoin Trust application for the third time this year, delaying it for November 14. More ETF applications are being filed, with two more this week from Bitwise and SkyBridge Capital.
Also Read: SBI Blocks Payments To Crypto Exchanges On UPI Platform
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