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Coinbase has officially acquired a unit of BUX, a European trading platform, based in Cyprus. The entity, formerly known as BUX Europe Limited, has been renamed Coinbase Financial Services Europe Ltd.
This strategic move secures Coinbase the coveted Cyprus Investment Firm (CIF) license. And this allows it to offer contracts for difference (CFDs) and other financial products throughout the European Economic Area (EEA).
Coinbase’s strategic entry into the European CFD market
The acquisition will help Coinbase penetrate the highly competitive CFD market. The CIF license enables the crypto exchange to offer highly complex financial derivatives that are particularly popular among professional and institutional investors.
Moreover, the license allows Coinbase to transfer its regulatory compliance to all EEA countries. This would enable further business expansion in Europe.
However, the Cyprus Securities and Exchange Commission (CySEC) recently approved the new Coinbase platform even though the service remains inactive.
Analysts believe Coinbase is targeting professional and institutional investors more than retail traders.
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This is in line with the recent tendency of crypto exchanges to expand their portfolios to attract more sophisticated investors.
Details of the BUX acquisition
The deal was concluded in October 2024 and indicates Coinbase’s desire to establish a presence in European licensed markets.
BUX, based in the Netherlands, first moved its Cyprus-based clients to AvaTrade, a CFD broker, before establishing the sale to Coinbase.
BUX CEO Yorick Naeff said the deal is in line with the company’s strategic direction and focus on stocks and ETFs, which was acquired by ABN AMRO BANK last year.
“We are pleased to sell our MiFID licensed entity, BUX Europe Limited (BEU) to Coinbase, a globally recognized leader in the crypto industry.” Naeff said.
This is a significant deal for Coinbase. He seems more interested in BUX’s operational capabilities and compliance permissions than his user base.
Holding a MiFID license, Coinbase is poised to expand and offer contracts for difference (CFDs) among other financial instruments.
Crypto exchanges enter the CFD market
Coinbase’s acquisition of the Cyprus-based unit of BUX comes on the heels of other cryptocurrency exchanges entering the traditional financial market.
CFDs are derivatives that allow market participants to trade on asset price fluctuations without owning the asset and have been popular among professional traders for some time.
Importantly, Coinbase is not the only crypto exchange interested in CFDs. Crypto.com recently acquired Fintek Securities, which is an Australian regulated CFD broker.
Bybit operates under a Mauritius license to offer forex and CFDs. Binance also recently managed to get approval from the Central Bank of Brazil to purchase a locally licensed broker-dealer.
This is Binance’s third regulatory approval of the year and 21st globally, cementing its position as the world’s most licensed cryptocurrency exchange.
This growing interest in regulated financial products shows that crypto exchanges are expanding their services to meet the competition.
Implications for the European market
This comes after Coinbase secured a new CIF license which will see the company increase its services to institutional investors across Europe.
This comes in light of the growing demand for regulated financial products in the cryptocurrency market.
To that end, Coinbase is well-positioned to offer institutional investors a one-stop solution to access digital assets and other financial instruments thanks to the new infrastructure it recently acquired.
The deal comes as BUX is also pursuing a sales strategy as part of its business approach. BUX previously sold its UK CFD business to APM Capital, an organization based in the UAE.
Yorick Naeff noted that BUX now deals in stocks and ETFs and said, “We wish Coinbase continued success as it expands its presence in the European market.”
