Coinbase Explores European Crypto Derivatives Market and FTX Acquisition, but Deal Remains Elusive

New Delhi(Coinchapter.com): Coinbase, the publicly-traded US cryptocurrency exchange, had its sights set on launching crypto derivatives offerings into Europe. According to Fortune’s recent report, Coinbase was exploring the possibility of acquiring the European branch of FTX, known as FTX Europe. However, these acquisition talks between Coinbase and FTX ultimately did not reach a final agreement.

Coinbase had strategized to introduce crypto derivatives to the European market, targeting the lucrative segment of complex investment tools linked to the value of cryptocurrencies like Bitcoin and Ethereum. These crypto derivatives have become a substantial part of the overall crypto trading landscape.

Recent data provided by Kaigo Research for the latter half of 2023 reveals a surge in crypto derivatives trading volume. This volume surpassed traditional spot trading by a factor of six. This data underscores the growing interest and demand for crypto derivatives as sophisticated investment instruments.

Coinbase’s quest for global dominance in the cryptocurrency space has seen the exchange establish a strong presence in Asia in recent years. To tap into local markets, Coinbase, along with its rival Gemini, set up cryptocurrency exchanges in the Asian region. 

Moreover, just before the end of this summer, Coinbase received regulatory approval to offer cryptocurrency futures trading services to its US-based clients. This development is poised to bring cryptocurrency futures trading to the forefront, with a launch expected in the coming weeks, as reported by Fortune’s sources. 

The Rise and Fall of FTX Europe

Until early November of the previous year, FTX Europe stood as the sole platform in Europe offering perpetual futures contracts. This unique position was maintained due to its possession of a Cypriot license. This license is a crucial requirement from local regulators for providing such financial products. However, Europe has since implemented its own set of cryptocurrency regulatory rules.

Documents scrutinized by Fortune reveal that FTX Europe continued to onboard thousands of new users, demonstrating its robust growth trajectory. However, this momentum came to an abrupt halt with the crash of its parent company, FTX.

Coinbase expressed keen interest in potentially acquiring FTX Europe shortly after FTX’s collapse in late 2022. However, it appears that Coinbase has since abandoned its pursuit of the acquisition. 

Notably, Coinbase wasn’t the only contender eyeing FTX Europe. The prominent exchange, Crypto.com, was also reportedly among the candidates exploring the possibility of acquiring the European branch.