The securities regulator has alleged that Coinbase is operating as an unregistered securities exchange, broker, and clearing agency

Coinbase Global said it received regulatory approval to offer US retail customers regulated crypto futures in the coming months, sending its stock 5 per cent higher before the market open on Wednesday.

The US’ biggest crypto exchange said it secured the consent from NFA, a self-regulatory organization designated by the CFTC.

The approval comes as Coinbase contends the US SEC in court. The securities regulator has alleged that Coinbase is operating as an unregistered securities exchange, broker, and clearing agency.

The case will possibly boil down to whether specific crypto assets should be considered securities or commodities in the US. Earlier in August, Coinbase asked a US judge to reject the lawsuit, contending that the crypto currencies sold through its exchange are more like baseball cards than investment securities.

Coinbase’s stock is 123 per cent higher YTD, despite the Securities and Exchange Commission lawsuit, but it has dropped since reporting earnings earlier this month.

Coinbase filed for approval to offer regulated crypto products soon after its Initial Public Offering (IPO) two years back. Last year, it acquired futures exchange FairX, now rebranded to Coinbase Derivatives Exchange.

The firm has since launched trading in bitcoin and ether futures for institutional investors. Earlier in 2023, it also announced plans to spin out a derivatives platform for non-US citizens.

The new approval from the NFA to offer crypto futures to US investors is a considerable landmark for bringing federal regulatory supervision over the crypto markets, stated Coinbase’s chief policy officer Faryar Shirzad.

Greg Tusar, VP of institutional product at Coinbase, stated in a blog post that Coinbase is the first crypto-only platform to offer regulated crypto futures products and spot crypto trading to US investors.

Access to a CFTC-regulated crypto derivatives market is vital to unlocking significant growth and enabling wider involvement in the cryptoeconomy, he said.