After attempting to acquire FTX Europe to boost its international derivatives business, Coinbase pivoted to offer perpetual futures to qualified customers in and outside the U.S.

Coinbase, a major platform for trading cryptocurrencies, twice considered buying FTX Europe after it went bankrupt in November 2022. Their aim was to expand their services related to financial derivatives abroad. 

Despite these efforts, they’ve decided to back out of the acquisition. Coinbase looked into this deal two times: once right after FTX Europe’s financial troubles in November 2022, and again in September 2023. 

A Coinbase representative verified this, stating they’re continually exploring ways to grow their business globally. 

Other companies like and Trek Labs are also reportedly interested in FTX Europe. FTX initially spent close to $400 million to set up its European division.

FTX Europe was unique in that it was based in Cyprus and was the only company to offer certain trendy financial products like perpetual futures. 

A perpetual future is a type of derivative financial instrument often used in cryptocurrency markets. Unlike regular futures that have an expiration date, perpetual futures go on indefinitely until you decide to close the position. They’re designed to mimic the price of an underlying asset, like Bitcoin, without actually requiring you to own it. Traders use perpetual futures for various reasons, such as hedging against price changes or trying to profit from market movements. Traders can benefit from perpetual futures whenever the markets move, regardless of the direction, up or down.

If Coinbase had gone through with buying FTX Europe, they could have made more money from fees, especially since this type of trading is becoming more popular, even when the overall crypto market isn’t doing so well. 

In fact, Coinbase made $707 million in the second quarter of 2023, though their earnings from regular trades dropped by 13% from the last quarter.

Meanwhile, globally, the trading of these financial contracts on centralised platforms went up by almost 14% in June to a staggering $2.13 trillion. 

Binance led the way in this kind of trading, followed by OKX. Even Bitcoin futures trading saw a boost, especially on the CME exchange.

Coinbase now offers perpetual futures

As for Coinbase, they’ve already dipped their toes into this market in the U.S. and now just got the green light from authorities to offer this type of perpetual futures to non-U.S. qualified customers.

In the U.S., the green light from authorities allows Coinbase to offer Bitcoin and Ether futures contracts via its derivatives platform called FairX, which is overseen by the Commodity Futures Trading Commission. According to what Coinbase said when they announced this, these types of contracts make up nearly three-quarters of all crypto trading globally, making it a key entry point for traders.

Coinbase has announced its next steps in its “Go Broad, Go Deep” strategy, aiming to work closely with global regulators to shape a crypto-friendly framework. 

They’ve expanded access to perpetual futures contracts to qualified customers outside the U.S., reinforcing their mission to update the global financial system.

This move comes at a time when other crypto exchanges face increasing regulatory challenges. Perpetual futures are highly sought-after, making up about 75% of global crypto trading. Coinbase sets itself apart by offering these contracts within strict compliance rules. They’ve already seen over $5.5 billion in trading volume from institutions as of the second quarter. Their exchange follows regulations set by the BMA and offers multiple layers of user protection.

What makes Coinbase unique is its emphasis on security and compliance. They guarantee a 1:1 hold on customer assets, and their financials are publicly audited. They’re also backed by a well-funded Insurance and Liquidity Support Program using the stablecoin USDC, rather than risky exchange tokens. Additionally, they have an experienced risk management team and don’t engage in market-making themselves.