Coinbase Acquires Regulated Futures Exchange to Expand Derivatives Offerings

Coinbase is purchasing CFTC-regulated derivatives exchange FairX for an undisclosed amount

article-image

Blockworks exclusive art by Axel Rangel

share

key takeaways

  • Coinbase is expected to acquire FairX this quarter
  • The move shows a growing trend for exchanges to diversify their offerings

Coinbase is buying Commodity and Futures Trading Commission-regulated derivatives exchange FairX for an undisclosed amount, the company announced Wednesday in a blog post.

Coinbase will initially offer derivatives trading through FairX’s existing infrastructure, but plans to eventually “leverage FairX’s infrastructure to offer crypto derivatives to all Coinbase customers in the US,” the post read.

The acquisition is essential to building out Coinbase’s offerings and meeting client demand, the company said.

Coinbase has historically reported trading fees as its main source of revenue, but the exchange has been trying for months to diversify its profit streams. In May 2021, the revamped version of Coinbase Prime, the exchange’s prime brokerage service, was announced. 

Expanding into derivatives trading, which is increasingly becoming more popular than spot trading, by volume, offers another opportunity for revenue diversification.

“These products are in high demand from investors who seek to effectively manage risk, execute complex trading strategies, and gain exposure to crypto outside of existing spot markets,” the blog post read. 

The acquisition comes as other cryptocurrency exchanges look to expand into the same market. In August 2021, FTX announced the purchase of futures and options platform LedgerX. 

“It’s only natural to want to engage the largest capital market in the world inside the US with that same product through all of our existing institutional and retail customers who want to trade these products,” FTX.US president Brett Harrison told Blockworks at the time. 

Coinbase’s acquisition is set to close in the first quarter of 2022. Terms of the agreement have not been disclosed.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

kamino cover.jpg

Research

Kamino has solidified its position as the leading money market on Solana and is emerging as a DeFi bluechip. Although DeFi competition is fierce, Kamino has kept iterating on its product to provide the best-in-class UX, paired with a robust risk management framework and battle-tested infrastructure. Given the rollout of Kamino Lend V2, the protocol may scale aggressively over the coming months, penetrating previously untapped markets in Solana DeFi.

article-image

Also in the tokenized fund space, Franklin Templeton launches on Base and Securitize hits $1 billion in tokenized RWA onchain

article-image

It turns out that bitcoin never actually hit an all-time high in March. Thanks a lot, inflation.

article-image

Spire, Citrea and Nillion also announced raises this week

article-image

The latest recipient of an SEC Wells notice is a Web3 gaming company

article-image

Thursday’s selloff was led by tech stocks, triggered by disappointing outlooks from giants Meta and Microsoft

article-image

Historically, positive returns have been a bit more of a toss-up during the year’s 11th month