Coinbase uses MiFID II to offer European derivatives

Coinbase aims to expand its derivatives offerings by acquiring a MiFID-licensed entity in Cyprus. Pending regulatory approval, this move will strengthen Coinbase's market presence in 2024.

MiFID II refers to the European Union's updated rules governing financial instruments. The EU updated the law in 2017 to address criticism that it was too focused on stocks and did not take into account other asset classes such as fixed income, derivatives and currencies.

According to a blog post, Coinbase may begin offering regulated derivatives such as futures and options in the EU under MiFID II. The company already offers spot trading in Bitcoin and other cryptocurrencies. The deal is subject to regulatory approval, and Coinbase expects to close in 2024.

Coinbase says it ensures compliance with a five-point global compliance standard that covers legal entity acquisition, anti-money laundering (AML), know-your-customer (KYC), international sanctions and governance. Compliance and operational integrity of the five-point global compliance standard in the cryptocurrency market.

Derivatives are a very important focus for Coinbase, accounting for 75% of total crypto trading volumes. While Coinbase aims to compete, it faces stiff competition from established players like Binance and other companies including Bybit, OKX, and Deribit. Derivatives are financial instruments that derive their value from the performance of an underlying asset, index or rate.

Related: Coinbase Holdings Changes Lead Ahead of Bitcoin ETF Decision: Report

Coinbase has been actively pursuing international growth due to challenges in its domestic market. He is currently facing charges from the US Securities and Exchange Commission for violating securities laws.

In October, the company chose Ireland as the EU's central regulatory hub in anticipation of upcoming crypto regulations for Markets in Crypto-Assets (MCA). The European Union has applied for an MCA license with the aim of keeping the rules until December 2024 when they are fully implemented.

In December, Coinbase received a virtual asset service provider license from France, allowing it to offer safekeeping and trading in crypto assets in the country.

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