Coinbase is set to broaden its derivatives offerings in the European Union through the acquisition of a MiFID-licensed entity in Cyprus. This move, which is still awaiting regulatory approval, is expected to bolster Coinbase’s market presence in 2024.
MiFID II is the EU’s revised legislation governing financial instruments. The legislation was updated in 2017 to address concerns that it was overly concentrated on stocks and did not take into account other asset classes such as fixed income, derivatives, and currencies.
With a MiFID II license, Coinbase will be able to offer regulated derivatives in the EU, including futures and options. The company already provides spot trading in Bitcoin and other cryptocurrencies. The deal is contingent on regulatory approval, with Coinbase anticipating closure in 2024.
In order to acquire the entity, Coinbase has ensured compliance with its Five-point Global Compliance Standard. This standard covers Anti-Money Laundering (AML), Know Your Customer (KYC), global sanctions, and governance, and serves as a benchmark for compliance and operational integrity in the cryptocurrency market.
Derivatives are a key focus for Coinbase, accounting for 75% of total crypto trading volumes. Despite its ambitions, Coinbase faces tough competition from larger players such as Binance and other firms including Bybit, OKX, and Deribit. Derivatives are financial instruments that derive their value from the performance of an underlying asset, index, or rate.
Amid challenges in its home market, Coinbase has been actively seeking global expansion. The company is currently embroiled in a lawsuit with the U.S. Securities and Exchange Commission, which accuses it of violating securities laws.
In October, Coinbase chose Ireland as its central regulatory hub in the EU in anticipation of the forthcoming crypto regulations known as Markets in Crypto-Assets (MiCA). The company has applied for a single MiCA license, with the aim of securing it by December 2024, when the EU fully enforces the rules.
In December, Coinbase also secured a virtual asset service provider license from France, allowing it to offer custody and trading in crypto assets in the country.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Europe |
| Countries | 🇨🇾 🇺🇸 🇮🇪 🇫🇷 |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | None |
| Companies | U.S. Securities and Exchange Commission, European Union, OKX, Coinbase, Deribit, Bybit, Binance |
| Currencies | Bitcoin |
| Securities | None |
