The US-based cryptocurrency exchange Coinbase has announced the acquisition of FairX, a CFTC-regulated derivatives exchange.
According to the official announcement, the acquisition ‘is an important step toward Coinbase ultimately making the derivatives market accessible’ to its millions of customers in the United States.
FairX is the operating name of LMX Labs, LLC, which received approval as a designated contract market (DCM) under the Commodity Futures and Trading Commission in (CFTC) November 20202. Launched in May 2021, the trading platform has already secured brokerage partnerships with industry leaders like TD Ameritrade and E*Trade, ABN AMRO, Wedbush, Virtu Financial.
Coinbase will be initially looking to offer regulated crypto derivatives to market through the FairX existing partner ecosystem. The acquisition is set to close in the first quarter of 2022 with terms of the agreement not disclosed.
“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,” the announcement post read.
Over the past seven days, crypto derivatives accounted for $137 billion in 24-hour trading volume over the past day according to CoinGecko. In the same period, spot trading volume across crypto exchanges accounted for $55 billion.
This is not the first time a US-based crypto exchange has looked towards the derivatives market. In August, FTX.US, bought LedgerX, another derivatives trading platform regulated by the CFTC. Similarly, last month, Singapore-based Crypto.com announced the purchase of the North American Derivatives Exchange, revealing its entry into the US crypto derivatives market.