US crypto exchange Coinbase has acquired derivatives platform FairX.
In a new blog post, Coinbase says that a well-regulated derivatives market is critical for the long-term success of investors looking to get a foothold in the evolving crypto economy.
“Today, we’re announcing the acquisition of FairX, a CFTC-regulated derivatives exchange or Designated Contract Market, which represents our next step toward creating the robust and holistic trading environment investors are seeking. Through this acquisition, we plan to bring regulated crypto derivatives to market, initially through FairX’s existing partner ecosystem…
FairX brings a world-class team with deep expertise across product development, market structure, and compliance to Coinbase. Its market-leading exchange technology and proven ability to deliver listed futures in a straightforward, easy-to-understand structure, aligns with Coinbase’s commitment to creating a more fair, accessible, efficient, and transparent financial system enabled by crypto.”
Coinbase says it plans to leverage the platforms infrastructure to offer derivatives services to its US clients, and aims to make the market “more approachable” for Coinbase users.
In the summer of last year, crypto exchange FTX acquired derivatives platform LedgerX with a similar strategy, and Crypto.com also acquired derivates exchange Nadex.
FTX President Brett Harrison said that with the acquisition, the exchange was following an increased demand for derivatives coming from retail traders.
“There’s a huge amount of interest both in the institutional and the retail side in trading crypto derivatives, and given FTX international’s success in the crypto derivatives market it’s only natural that we would eventually want to enter that market here in the U.S. as well,” Harrison said.
Currently, US regulators only allow for derivatives contracts in Bitcoin (BTC) and Ethereum (ETH), so Coinbase will presumably only start with the two largest crypto assets by market cap, similar to FTX.US’ offerings.