Coinbase receives CFTC approval to launch derivatives clearinghouse

Coinbase received CFTC approval to launch Coinbase Clearing LLC, its own US-based derivatives clearing organization. The registration became effective Monday. It permits Coinbase Clearing LLC to clear fully collateralized futures, options on futures and swaps. The registration does not permit the clearinghouse to clear its leveraged products. Molly Abraham, Coinbase's general counsel, said the approval completes Coinbase's end-to-end derivatives infrastructure. Abraham said it enables Coinbase to bring more regulated derivatives products to market with native USDC collateral and 24/7 settlement. The approval gives Coinbase control over another key part of its derivatives business. Coinbase already has futures broker Coinbase Financial Markets Inc. Coinbase also has exchange Coinbase Derivatives LLC. A derivatives clearing organization stands between the buyer and seller in a derivatives trade. A derivatives clearing organization helps manage settlement and counterparty risk, including if one party defaults. Coinbase's derivatives exchange lists US-regulated futures tied to cryptocurrencies such as Bitcoin and Ether. The exchange also lists commodity and equity-index futures. Coinbase also provides long-dated perpetual-style crypto futures. Kraken parent Payward completed its acquisition of Bitnomial in May. The acquisition gave Payward a CFTC-regulated exchange, clearinghouse and futures brokerage.