Crypto major Coinbase has acquired FairX, a US-based derivatives platform, as it looks to bring regulated crypto derivatives to the market and its large set of users.
The acquisition could mean that Coinbase would be offering crypto derivatives to retail and institutional customers in the US. In the long run, the crypto exchange wants to make sure that its customers can access the derivatives market. FairX’s existing partner ecosystem would be useful in realizing Coinbase’s dream.
The crypto exchange said that it planned to leverage FairX’s infrastructure to offer crypto derivatives to all Coinbase customers in the US. It said that it wanted “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.”
However, the deal is not set in stone yet and is subject to customary closing conditions and reviews. It is expected to close in Coinbase’s first fiscal quarter.
As for FairX, it is a derivatives exchange that is regulated by the Commodity Futures Trading Commission (CFTC). It is a fairly new player in the market, having made its debut last year, but it has already made a name for itself. Today, it has relationships with major brokerages including TD Ameritrade, E*Trade, ABN AMRO, Wedbush, Virtu Financial, and others.
Coinbase believes that the creation of a transparent derivatives market will unlock further participation in the crypto-economy for both retail and institutional investors, and a healthy, well-regulated derivatives market would be critical for long-term success and essential to the functioning of traditional capital markets. “The development of a transparent derivatives market is a critical inflection point for any asset class and we believe it will unlock further participation in the crypto-economy for retail and institutional investors alike,” it said.