Coinbase, the U.S. based centralized crypto exchange, acquired FairX, a derivatives exchange, as a way of entering the derivatives markets. The world’s third-largest crypto exchange by 24-hour volume is known for following the guidelines of local regulators, and in a bid to legally offer derivatives, it purchased a Designated Contracts Market (DCM) derivatives exchange that is regulated by the Commodity Futures Trading Commission (CFTC).
FairX is barely a year old, but it has formed a strong relationship with leaders in the industry, making it attractive to Coinbase.
As a derivatives trading platform, FairX allows users to trade products that are linked to the value of an underlying asset, but not the underlying asset itself.
Coinbase released an announcement on January 13, stating that it had the intention of offering derivatives trading in its ecosystem.
“Today, we’re announcing the acquisition of FairX, a CFTC-regulated derivatives exchange or Designated Contract Market, which represents our next step toward creating the robust and holistic trading environment investors are seeking. Through this acquisition, we plan to bring regulated crypto derivatives to market, initially through FairX’s existing partner ecosystem. Over time, we plan to leverage FairX’s infrastructure to offer crypto derivatives to all Coinbase customers in the US. We want to make the derivatives market more approachable for our millions of retail customers by delivering an easy-to-use user experience that Coinbase is known for.”
According to the announcement on its blog, Coinbase stated, “We want to make the derivatives market more accessible for our millions of retail customers.”
The crypto exchange also made an announcement on Twitter that derivatives trading was introduced to improve the experience of users.
“Creating a transparent derivatives market will unlock additional participation in the crypto economy for retail and institutional investors.”
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