To compete in the TradFi market, Coinbase exchange has snapped up Stryk, a former BUX platform for CFD trading
Coinbase, the largest cryptocurrency exchange in the U.S, has significantly expanded in the crypto sector. Coinbase has acquired the Cyprus unit of BUX, formerly Stryk. Following the acquisition, it has renamed the entity Coinbase Financial Services Europe.
Leveraging The MiFID License for Regional Expansion
According to a report, Yorick Naeff, CEO of BUX, affirmed the acquisition in a statement. Naeff said BUX had concluded sales of its MiFID-licensed entity, BUX Europe Limited, to Coinbase. He expressed delight after the deal to a globally renowned crypto leader.
With this deal sealed, Coinbase can leverage the Cyprus license to make inroads into all European Economic Area (EEA) member states. It can provide financial products, including offering regional contracts for differences (CFDs).
Meanwhile, in a notable development, the Cyprus Securities and Exchange Commission has approved a domain name. The commission registry confirmed
“coinbase.com/international-exchange/europe” as the domain name even though it has not become operational as of this writing.
Although Coinbase has not released any official statement about the move, experts have begun speculating on the exchange’s interest. The prevailing assumption is that the exchange might want to target professional and institutional clients. That is, utilizing the BUX license and the operational infrastructure to seek out its new client base.
Is Coinbase Joining the CFDs Train?
For context, contracts for differences (CFDs) refer to financial derivatives that allow traders to speculate on the price movement of assets. The traders do not necessarily have to own the assets, such as stocks, currencies, or cryptocurrencies. CFDs are favored only by experienced traders due to their inherent complexities and risks.
With Coinbase showing potential interest in CFDs, it could become the latest exchange to join others in the assets category. For instance, Bybit has an active Mauritius license, which allows it to offer its users CFDs and forex. The industry looks forward to Coinbase unveiling its plans and offerings for users.
The exchange recently had issues with its European customers over its decision to comply with the region’s Markets in Crypto-Assets (MiCA) regulations.
The decision of Coinbase to end its USDC reward program for users in the EEA did not sit well with its customers. Some users relied on the program to earn passive income on their USDC holdings. So, ending it meant stopping that stream of income for such users.
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