Coinbase to acquire FairX for CFTC-regulated derivatives trading

The exchange operator recently welcomed Charles Schwab Futures, Forex LLC and E*TRADE to its list of partners, which includes Hudson River, Virtu Financial, XTX Markets, Tradovate, Ironbeam, Stage 5, EdgeClear, Bookmap, CQG, Rithmic, Sierra Chart, TradingView and dxFeed .

Coinbase has announced the acquisition of FairX, a CFTC-regulated derivatives exchange or designated contract market, as part of its strategy to develop a comprehensive trading environment for investors, including regulated crypto derivatives to market.

The digital asset trading platform for retail and institutional clients will go down the path of derivatives trading initially through FairX’s existing partner ecosystem, and over time, by leveraging FairX’s infrastructure to offer crypto derivatives to all Coinbase clients in the United States.

The well-regulated derivatives market is part of the mature asset class, which is moving Coinbase to FairX in order to make the derivatives market more accessible to the millions of retail customers registered with Coinbase.

Coinbase O’Melveny & Myers has been notified while FairX has leveraged DLA Piper in order to make the acquisition deal go smoothly, although the companies have not disclosed the value of the deal.

Since its launch in June, FairX has seen trading volume consistently reach new highs, with ADV growing 33% on a weekly basis. The exchange operator recently welcomed Charles Schwab Futures, Forex LLC and E*TRADE to the list of broker partners, opening the distribution to a very large number of global clients.

Earlier in 2021, Hudson River Trading joined forces with Virtu Financial and XTX Markets as a market maker and liquidity provider for FairX, thereby enhancing the price flow of exchange-listed products.

The distribution network of retail-focused brokers and suppliers that provide access to FairX futures also includes Tradovate, Ironbeam, Stage 5, EdgeClear, Bookmap, CQG, Rithmic, Sierra Chart, TradingView and dxFeed.

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Retail traders are generally considered cannon fodder for institutions and major traders on major exchanges and it is interesting that FairX proposes to be an exchange for this category of traders.

The idea is to create a futures exchange that is smaller and simpler for active retail traders who may feel neglected or overwhelmed by the major futures exchanges controlled by the big players.

The exchange began with a list of products that includes futures contracts on the US Bloomberg Large Cap Index, an index that tracks the 500 largest companies by market capitalization, the Bloomberg US Dollar Index, which tracks the value of the US dollar against a basket of international currencies, as well as the SuperTech Index, which It tracks 15 of the largest and most traded companies in the technology, media and manufacturing industries.

FairX will bring a team with deep experience in product development, market structure and compliance to Coinbase, once the transaction is completed in Coinbase’s first fiscal quarter. FairX will function normally during this time.

The futures exchange’s straightforward approach and structure are in line with Coinbase’s commitment to creating a more fair, accessible, efficient and transparent financial system that is enabled by crypto, the crypto exchange said.

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