Coinbase Uses MiFID II to Improve European Derivatives Choices

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Coinbase MiFID

Leading US cryptocurrency exchange Coinbase has entered an agreement to acquire a company holding a Markets in Financial Instruments Directive II (MiFID II) license, allowing it to offer regulated crypto derivatives to eligible customers across the European Union. The move represents Coinbase’s first foray into offering digital asset derivatives within the EU and a major step forward in its goal of bringing accessible cryptocurrency products to more global markets.

Securing an EU MiFID II License

Coinbase MiFID

Sources close to the deal confirmed that Coinbase signed an agreement to purchase an unnamed European holding firm which owns a MiFID II license. MiFID II rules govern all financial instruments traded in the EU and require authorization for any companies providing investment services or activities. Obtaining this license will permit Coinbase to lawfully supply regulated derivatives like futures and options contracts to qualified EU-based traders and institutions. The acquisition remains subject to regulatory approval processes and is projected to close later in 2024. Coinbase outlined plans to meticulously adhere to all relevant anti-money laundering, consumer protection, and sanctions compliance standards mandated throughout Europe.

Expanding Crypto Options for International Markets

With a specialized MiFID II authorization, Coinbase aims to progressively introduce its popular cryptocurrency derivatives offerings to the European market. These include Bitcoin, Ether and crude oil futures contracts along with “nano” ether futures, representing 75% of overall crypto volumes according to company statistics. Coinbase noted its long-standing goal of equitably serving professional, commercial and retail customers worldwide through trusted, regulated products and services. This represents an important step towards bridging the digital asset space and traditional finance sector on an international scale.

Coinbase MiFID

Currently, Coinbase dominates the US crypto derivatives industry but lags significantly behind exchanges like Binance and OKEx for global trading volumes. Securing a European hub will help Coinbase better compete with dedicated cryptocurrency traders across Europe seeking regulated options for managing crypto price risk and exposure. Coinbase also emphasized its sustained commitment to enforcing stringent anti-financial crime compliance, as European regulators maintain a highly cautious approach towards cryptocurrencies and digital assets.

Over 400 specialists support Coinbase’s proprietary five-point global monitoring system focused on anti-money laundering surveillance, customer identification verification and international sanctions screening. Completing this transaction and launching authorized EU-based derivatives depends on navigating an exhaustive regulatory review process. However, Coinbase remains unwavering in working to expand the trillion-dollar cryptocurrency economy and provide inclusive access for one billion potential participants worldwide.

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