Coinbase Expands to Europe with Acquisition and Eyes Institutional Investors

Coinbase Makes Strategic Move in Europe

Coinbase has acquired the Cyprus unit of BUX, a European trading platform, securing a coveted Cyprus Investment Firm (CIF) license. This license allows Coinbase to offer complex financial products like Contracts for Difference (CFDs) across the European Economic Area (EEA).

Benefits of the Acquisition

• Entry into the CFD Market: The CIF license allows Coinbase to enter the competitive CFD market, popular among professional and institutional investors.
• Expanded Services in Europe: The license enables Coinbase to offer its services across all EEA countries, facilitating further European expansion.
• Targeting Institutional Investors: Analysts believe Coinbase is targeting professional and institutional investors, aligning with the trend of crypto exchanges attracting more advanced investors.

Acquisition Details

• The deal, finalized in October 2024, highlights Coinbase's desire for a presence in Europe's licensed markets.
• BUX, based in the Netherlands, transferred its Cyprus clients to AvaTrade before the sale to Coinbase.
• BUX CEO Yorick Naeff emphasizes the deal aligns with their focus on shares and ETFs, acquired by ABN AMRO Bank in 2024.

Coinbase Seeks Operational Capabilities

This deal suggests Coinbase is more interested in BUX's operational capabilities and compliance permissions than its user base. The MiFID license allows Coinbase to offer CFDs alongside other financial instruments.

Crypto Exchanges Embrace Traditional Finance

Coinbase's move follows other crypto exchanges venturing into traditional finance:

• Crypto.com: Acquired Fintek Securities, an Australian CFD broker.
• Bybit: Operates under a Mauritius license for forex and CFD offerings.
• Binance: Recently obtained approval from Brazil's Central Bank to buy a local broker-dealer.

Coinbase Well-Positioned for Institutional Investors

With the new infrastructure and CIF license, Coinbase is well-positioned to offer institutional investors a one-stop shop for accessing digital assets and other financial instruments.

Coinbase Capitalizes on Growing Demand

This acquisition aligns with the increasing demand for regulated financial products in the cryptocurrency market. Coinbase can now cater to this demand across Europe.

BUX Focuses on Shares and ETFs

The deal aligns with BUX's divestment strategy, having previously sold its UK CFD business. BUX is now focused on shares and ETFs.

Coinbase's European Expansion Continues

This move strengthens Coinbase's presence in Europe, offering a wider range of services to institutional investors.

January 2025, Cryptoniteuae