Coinbase, the prominent cryptocurrency exchange, is advancing its European operations by acquiring a Cyprus-based entity licensed under the EU’s Markets in Financial Instruments Directive (MiFID).
According to the company’s blog post, the acquisition aligns with Coinbase’s strategy to enhance its presence in the European market. The MiFID license is critical to the EU’s regulatory framework, governing investment services and activities across member states. By acquiring this license, Coinbase positions itself to access a larger segment of the global crypto market, particularly in derivatives, which constitute a significant portion of crypto trading activities.
In its expansion efforts, Coinbase emphasizes compliance with regulatory standards. The company outlines a Five-point Global Compliance Standard, focusing on areas such as team vetting, Anti-Money Laundering (AML) and Know Your Customer (KYC) protocols, global sanctions enforcement, governance practices, and ongoing monitoring and reporting. These measures reflect Coinbase’s approach to align with international regulatory requirements.
The compliance and legal team at Coinbase, comprising over 400 professionals with experience in various regulatory bodies, is tasked with overseeing the implementation of these standards. Their backgrounds include work with institutions like the FBI, DOJ, OFAC, FinCEN, and major banks. The completion of the acquisition is subject to customary closing conditions, including regulatory approvals. Coinbase anticipates finalizing the acquisition in 2024, marking a significant step in its European market expansion efforts.
On 14 December 2023, Coinbase Institutional released a research report titled “2024 Crypto Market Outlook,” authored by David Duong, CFA, the Head of Institutional Research at Coinbase. Duong shared an overview of this extensive 83-page report on LinkedIn, diving into the anticipated trends and developments in the cryptocurrency market for 2024.
Duong observed that the total market capitalization of cryptocurrencies doubled in 2023, suggesting an end to the “crypto winter” and a new phase for the asset class. He advised caution in interpreting this recovery as a definitive rebuttal to critics who prematurely declared the end of cryptocurrencies. According to Duong, the progress made over the past year exceeded expectations, solidifying the status of cryptocurrencies in the financial world. He sees the current challenge as leveraging this momentum to foster a stronger, more innovative crypto ecosystem.
The report identifies several key themes for 2024:
- Institutional Investment in Bitcoin: Duong expects institutional investment to remain focused on Bitcoin, especially in the first half of 2024. This trend is fueled by growing interest from traditional investors looking to enter the cryptocurrency market.
- Macro Framework Reset: The report predicts favorable macroeconomic conditions for risk assets in 2024. Duong points to ongoing disinflation, a potential slowdown in U.S. economic activity, and possible Federal Reserve rate cuts as positive factors for the crypto market. He also underscores the importance of evolving crypto regulations in fostering long-term adoption.
- Real-World Applications: Duong anticipates continued development of practical applications for cryptocurrencies, including in gaming, decentralized physical infrastructure (DePIN), and decentralized identity solutions. He notes that the groundwork for these applications is set, with further advancements expected in 2024.
- Blockchain User Experience: Duong highlights ongoing efforts to enhance the user experience in the crypto space. He is optimistic that these improvements will facilitate the industry’s shift from early adopters to mainstream users, marking a crucial evolution in blockchain technology.
Featured Image via Coinbase