Coinbase retail U.S. traders will be able to trade crypto futures, including Bitcoin (BTC) and Ethereum (ETH), through its Coinbase Financial Markets subsidiary, according to a Nov. 1 statement from the firm.
The exchange explained that the new development allows interested Coinbase advanced users to trade the monetary value of 1/100 Bitcoin and 1/10 Ethereum futures contracts.
Futures trading allows investors to hedge risks and diversify their portfolios while speculating on market movements. According to Coinbase, a futures contract is an agreement to buy or sell an asset or commodity at a future date and price. As a result, futures are derivatives gaining their value from underlying assets like BTC and ETH.
This development comes less than three months after the exchange had secured licensing from the National Futures Association (NFA), a self-regulatory organization designated by the CFTC to operate as a Futures Commission Merchant (FCM).
Coinbase battle with the regulators
Meanwhile, Coinbase’s introduction of futures offerings coincides with an ongoing legal battle involving the Securities and Exchange Commission (SEC).
In June, the SEC initiated a lawsuit against Coinbase, alleging violations of federal securities regulations in its cryptocurrency offerings.
The SEC’s argument centered on Coinbase’s simultaneous roles as a broker, exchange, and clearing agent, a departure from the traditional separation of these functions.
Since then, both parties have engaged in a series of legal exchanges where Coinbase has accused the SEC of attempting a radical expansion of its authority without recourse to Congress.
Nevertheless, Coinbase has demonstrated a commitment to achieving regulatory clarity within the cryptocurrency industry.
In a recent social media update, the company highlighted its efforts, including facilitating over 16,000 calls and emails to Congress.
Additionally, it has garnered support from over 100,000 crypto advocates and amassed over $2 million in pro-crypto donations for its StandWithCrypto campaign.