Coinbase advances expansion with EU MiFID licence acquisition

Coinbase's recent efforts are in line with its goals of supporting economic freedom for individuals by focusing on the development and expansion of trusted, compliant financial products and services. Employing the 'Go Broad, Go Deep' strategy, the company is establishing a foundation of clear rules, licences, and registrations to facilitate international expansion, accompanied by the implementation of a Five-point Global Compliance Standard. 

Coinciding with this global expansion initiative, Coinbase is in the process of acquiring a European Union MiFID (Markets in Financial Instruments Directive) licenced entity based in Cyprus. The MiFID plays an important role in the EU's Capital Markets Union strategy according to Coinbase. 

The acquisition of such a licence also aligns with Coinbase's strategy to meet the strong demand for derivatives products and capture a larger share of the global crypto market claimed by derivatives. Coinbase further reveals that all EU member states adhere to Single Market laws and regulations, including Anti-Money Laundering (AML), Know-Your-Customer (KYC), and sanctions requirements.  Before operationalising any license or serving customers, the company wants to ensure that the acquired entity aligns with its Five-point Global Compliance Standard.

More information about the standard

This standard encompasses: 

• Vetted and Trusted Team: screening personnel to meet Coinbase’s cultural principles, with ongoing compliance checks and adherence to internal policies. 
• Industry-leading AML and KYC standards: implementation of Coinbase’s Global AML Policy to comply with relevant laws, including EU AML standards, and strict KYC and due diligence requirements for customers.
• Ongoing monitoring and reporting: subjecting the entity to Coinbase’s global standards of monitoring, testing, and independent audits, including an annual independent AML assessment.
• Global sanctions enforcement: adherence to Coinbase’s Global Sanctions Policy to ensure compliance with US, European, and international sanctions regimes. 
• Governance best practices: integration into Coinbase’s global governance mechanisms, including board oversight, routine reporting, and the creation of a Compliance Oversight Working Group. 

This compliance framework is managed by Coinbase's team of compliance and legal professionals, who bring extensive experience from diverse backgrounds, including the FBI, DOJ, OFAC, FinCEN, Scotland Yard, and major banks. 

While the acquisition of the EU MiFID licenced entity is still in progress at the time of writing, Coinbase views it as a step toward expanding access to international derivatives offerings and advancing a more global and open financial system. The acquisition is anticipated to have no impact on Coinbase's financials, pending customary closing conditions, including regulatory approval, with an expected completion in 2024.