Coinbase is taking bold steps to expand its European footprint. The company recently acquired the Cyprus unit of BUX, a Netherlands-based investment service provider, and renamed it Coinbase Financial Services Europe Ltd. This move comes with a highly coveted Cyprus Investment Firm (CIF) license, which allows Coinbase to offer contracts for differences (CFDs) across the European Economic Area (EEA).
Key Takeaways:
- Coinbase acquired BUX’s Cyprus unit and now holds a CySEC license, enabling CFD services across the EEA.
- The acquisition focuses on institutional and professional clients, aligning with Coinbase’s larger strategy.
- This move comes as BUX shifts its focus to shares and ETFs, leaving its CFD business behind.
Let’s explore what this acquisition means for Coinbase, its clients, and the broader crypto industry.
Coinbase Secures a CySEC License for Broader Reach
With the CIF license issued by the Cyprus Securities and Exchange Commission (CySEC), Coinbase is now authorized to provide CFDs and other financial products across the EEA.
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This significant milestone enables the company to passport its services to multiple European countries, making it easier for institutional and professional clients to access its offerings.
Yorick Naeff, the CEO of BUX, expressed confidence in Coinbase’s leadership, stating:
“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.”
This regulatory move is a calculated step in Coinbase’s European expansion strategy. It positions the company to compete with established CFD providers while broadening its financial services portfolio.
What Does This Mean for Institutional Clients?
Coinbase’s newly acquired license underscores its focus on institutional and professional clients rather than retail investors. The platform is already a significant player in the institutional crypto space, offering custody services for 8 out of 11 Bitcoin ETF issuers in the US and managing nearly 90% of the $37 billion in Bitcoin ETF assets.
The CIF license now allows Coinbase to diversify its product offerings further, catering to the growing demand for CFDs and forex products among institutional investors. This move also aligns with similar strategies by competitors like Crypto.com, which acquired an Australian CFDs broker, and Bybit, which holds a Mauritius license for forex and CFDs.
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The Bigger Picture: BUX’s Strategic Shift
The sale of its Cyprus unit marks a significant milestone in BUX’s broader divestment strategy. Headquartered in the Netherlands, BUX has shifted its focus to shares and exchange-traded funds (ETFs) following its acquisition by ABN AMRO Bank.
In this process, BUX redirected its Cyprus-based clients to AvaTrade, another established CFD broker. Naeff emphasized that this move allows BUX to concentrate on its core offerings in the investment space:
“[This] divestment aligns BUX Holding’s strategic shift to focus exclusively on our shares and ETF offering.”
BUX has also exited the UK CFD market, selling its FCA-regulated unit to UAE-based APM Capital. This unit has since been renamed APM Markets, though it is yet to relaunch services.
Why Coinbase’s Expansion Matters
Coinbase’s acquisition signals a significant step in the evolution of the crypto industry. By venturing into the CFDs market and strengthening its presence in Europe, Coinbase is broadening its horizons while solidifying its position as a leader in institutional crypto services.
This move also comes at a time when the demand for diversified financial products, like CFDs, is growing among institutional clients. It reflects a broader trend of major crypto exchanges expanding their offerings to include traditional financial instruments.
Coinbase’s CySEC license opens up exciting opportunities for professional clients in European Economic Area. If you’re looking for innovative financial solutions in the crypto space, this is the perfect time to explore Coinbase’s offerings. With its robust infrastructure and regulatory backing, Coinbase is set to redefine the way institutions approach crypto and CFDs.
