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Coinbase, one of the leading cryptocurrency exchanges, is planning to venture into the derivatives market in the European Union (EU). The company has entered into an agreement to acquire an unnamed holding company based in Cyprus, which possesses a MiFID II license. This license will allow Coinbase to provide regulated futures and options to customers in select EU countries.

The move into derivatives trading is significant for Coinbase as derivatives account for 75% of overall crypto trading volumes. By expanding its offerings to include derivatives, Coinbase aims to cater to professional and institutional customers who are increasingly interested in these financial instruments.

However, Coinbase faces competition from larger players like Binance in the market for crypto-linked derivatives. Additionally, the company currently does not offer crypto derivatives products in the UK due to regulatory restrictions.

Acquisition of MiFID-licensed Entity

Coinbase’s acquisition of the MiFID-licensed entity is subject to regulatory approval and is expected to close later in 2024. While the name of the holding company has not been disclosed, Coinbase believes that adding this license to its international portfolio will support the strong interest in its derivatives offerings and help capture a larger share of the global crypto market.

The news was reported by The Block, an independent media outlet that focuses on delivering news and data related to the crypto industry. The Block is majority-owned by Foresight Ventures, an investment firm that specializes in the crypto space.

It is important to note that the article provided is for informational purposes only and should not be considered as legal, tax, investment, financial, or other advice.

In conclusion, Coinbase’s plan to offer crypto-linked derivatives in the EU market marks its first venture into this sector in the region. The acquisition of the MiFID II license will allow Coinbase to expand its services and cater to professional and institutional customers who are increasingly interested in derivatives. However, the company will face competition from larger players in the market. Overall, this move highlights Coinbase’s ambition to grow its presence and offerings outside of the United States.

By Rajesh

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