Coinbase Inc. (COIN) has achieved an unprecedented milestone in U.S. oversight by winning approval to handle customers’ buying and selling of crypto futures. The company is now registered as a futures commission merchant, or FCM, with the Commodity Futures Trading Commission (CFTC), akin to an SEC-registered broker-dealer. This is the first time a crypto-native company has won this designation, potentially blazing a path to U.S. oversight – at least in the world of commodities.
Dan Davis, a former general counsel at the CFTC, said, This is just one further nudge – a little bit of extra confidence, a little bit of extra comfort that ether is – in fact – not a security. Coinbase’s FCM registration is a core part of the machinery in the financial sector, and there’s a high bar to winning that label.
Justin Slaughter, who has worked at both the CFTC and SEC, said, You really see the branching paths that the CFTC has taken versus the SEC. The CFTC focused on getting a major crypto player registered, while the SEC ‘is going to court to sue everybody.’
Brent Xu, CEO and co-founder of Umee, said, The CFTC has essentially said that Coinbase is a fully legitimate actor in the United States at a time when the SEC is saying that the exchange is not.
Anthony Michael Sabino, a lawyer and professor at St. John’s University, said, It’s like having a new Major League Baseball franchise. It’s great for investors. It’s good for market predictability and stability.
Coinbase will inform U.S. customers about how to access the service in the coming months. Zachary Townsend, co-founder and CEO of Meanwhile, said the CFTC allowing a crypto-native company to join the ranks of traditional firms is a sign that the SEC is out of step.
The new status proves a crypto company can clear the regulatory hurdles and that the CFTC is willing to allow it to. Justin Slaughter said, The CFTC had the courage and Coinbase had the drive to answer those questions, and now the pathway is open.