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Coinbase, the cryptocurrency exchange giant, is gearing up for a major move in Europe, announcing plans to offer crypto-linked derivatives in the EU by acquiring a MiFID II-licensed company. This move is seen as a major step in the company’s goal of reaching professional and institutional investors worldwide.
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EU Gateway
The MiFID II license would pave the way for Coinbase to offer regulated derivatives such as futures and options in the EU. This step would mean that the company would be offering a more comprehensive service, beyond spot (instant) trading services for assets such as Bitcoin and other cryptocurrencies.
The deal is currently awaiting regulatory approval and is expected to be completed by the end of 2024.
Compliance Commitment (Coinbase)
Coinbase emphasizes its commitment to adhering to strict EU compliance standards, including anti-money laundering, customer transparency, and sanctions. The company states that it has a strong team of 400 people with expertise from institutions such as the FBI and the Department of Justice to ensure robust compliance in its global operations.
Derivatives: A Critical Battleground:
Coinbase acknowledges the important role that derivatives play in cryptocurrency trading, stating that 75% of total volume comes from this segment. The company sees this move as essential to gaining a larger share of the market, despite stiff competition from giants such as Binance and Bybit.
This move continues Coinbase’s recent international expansion efforts to offset challenges in the US market (such as the SEC lawsuit). The designation of Ireland as its primary EU regulatory base and applications for additional licenses in France and potentially under MiCA reflect the company’s commitment to building a strong presence in Europe.
Looking Ahead:
While the completion of the acquisition and the operationalization of the EU entity lie ahead, this move is seen as a bold step in Coinbase’s global expansion strategy. The success of this endeavor will depend on its ability to overcome regulatory hurdles, effectively compete in the derivatives space, and achieve maximum compliance in various markets.