The prominent cryptocurrency exchange Coinbase has revealed its strategic aim to purchase a MiFID-licensed firm in Cyprus. This strategic step is crucial to Coinbase’s expansive agenda to bolster its derivatives portfolio within the EU. The acquisition hinges on regulatory endorsement, with the anticipated closure of the deal slated for later in 2024.
In a blog post released on Friday, the company outlined its overarching mission to enhance economic freedom for over a billion individuals globally. The company emphasized its commitment to building trusted, compliant products and services while expanding their adoption globally. Coinbase’s “Go Broad, Go Deep” strategy aims to establish a foundation of clear rules, licenses, and registrations to facilitate international expansion. Furthermore, the company’s Five-point Global Compliance Standard ensures its offerings remain among the most trusted in the market.
The acquisition of a MiFID license is pivotal for its European expansion plans. The Markets in Financial Instruments Directive is a highly esteemed regulatory framework governing investment services and activities across the EU. Acquiring a MiFID-licensed entity in Cyprus would enable Coinbase to offer its derivatives products to eligible customers in select EU countries, thereby increasing accessibility.
The EU MiFID license is particularly significant, aligning with the company’s goal to capture a larger share of the global crypto market, currently dominated by derivatives. With approximately 75% of the market claimed by derivatives, this move positions Coinbase strategically to meet the growing demand for such financial instruments.
Coinbase’s Five-point Global Compliance Standard
Coinbase reaffirms its dedication to adhering to regulatory standards within the cryptocurrency sphere, emphasizing its Five-point Global Compliance Standard as a robust and all-encompassing framework. This standard encompasses meticulous scrutiny of personnel, strict adherence to top-tier anti-money laundering (AML) and know-your-customer (KYC) protocols, stringent enforcement of global sanctions, incorporation of governance best practices, and continual surveillance and reporting measures.
The company emphasizes the expertise of its over 400 compliance and legal professionals, drawing from diverse backgrounds, including the FBI, DOJ, OFAC, FinCEN, Scotland Yard, and major banks. Coinbase acknowledges the long road ahead before finalizing the acquisition and operationalizing the EU MiFID license but views this step as a significant stride towards bringing a more global and open financial system to over a billion people worldwide.
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