CySEC License Unlocks CFD Opportunities for Coinbase in Europe

Coinbase, the largest US-based crypto exchange, has acquired the Cyprus unit of BUX and rebranded it as Coinbase Financial Services Europe.

This move provides Coinbase with a coveted Cyprus Investment Firm (CIF) license, allowing the crypto exchange giant to offer Contracts for Differences (CFDs) across the European Economic Area (EEA).

Coinbase Expands Horizons with a CySEC License

The acquisition, reported by Finance Magnates, marks a pivotal moment in Coinbase’s European strategy. With the CIF license issued by the Cyprus Securities and Exchange Commission (CySEC), Coinbase gains the regulatory green light to expand its financial product offerings, particularly to professional and institutional clients.

The license also enables Coinbase to pass its services to other EEA countries, strengthening its foothold in the region.

“We are pleased with the sale of our MiFID licensed entity, BUX Europe Limited (BEU), to Coinbase, a globally recognized leader in the crypto industry,” BUX CEO Yorick Naeff said.

Although Coinbase has not officially confirmed its intent to venture into CFDs, the infrastructure acquired from BUX positions it to compete with established CFD providers. Elsewhere, the acquisition of BUX’s Cyprus unit follows BUX’s broader divestment strategy.

Headquartered in the Netherlands, BUX has shifted focus to shares and ETFs (exchange-traded funds), leaving its Cyprus-based clients to AvaTrade. Naeff emphasized that the sale aligns with BUX Holding’s strategy to concentrate on its core offerings after ABN AMRO acquired the majority of its business.

Coinbase Targets Professional Clients

Meanwhile, Coinbase’s focus under this new license appears to be on institutional and professional clients rather than retail investors. This aligns with its broader strategy of catering to large-scale market participants. As part of its institutional offerings, Coinbase already provides custody services for 8 of 11 Bitcoin ETF issuers in the US.

It also offers trading execution and market surveillance services, managing around 90% of the $37 billion in Bitcoin ETF assets. However, some experts have raised concerns about Coinbase’s dominance in this space.

“It doesn’t bode well that nearly all crypto ETF issuers have the same custodian for all their BTC and ETH. This makes Coinbase a potential single point of failure, and that’s scary,” Fox Business correspondent Eleanor Terrett said recently.

These questions about market concentration and potential risks highlight the need for a diversified approach as the crypto market matures. Notwithstanding, the acquisition of BUX’s Cyprus unit signals Coinbase’s calculated expansion into new financial territories bolstered by strong institutional support.

With its CIF license, Coinbase is poised to enhance its European offerings while continuing to dominate the institutional crypto space.  The acquisition also comes after Coinbase wrapped up a strong 2024 with stellar end-year financial results. According to recent reports, Coinbase is well-positioned for growth in 2025, buoyed by increasing institutional interest in crypto products.

Still, Coinbase is not alone in exploring the potential of CFDs. Crypto.com recently acquired Fintek Securities, an Australian CFDs broker, while Bybit holds a Mauritius license to offer forex and CFD products. The surge in interest reflects a growing demand for diversified trading options among institutional clients.