Coinbase Acquires The Clearing Company in Prediction Market Push
TL;DR
Coinbase acquires The Clearing Company, a derivatives clearinghouse, to strengthen its entry into prediction markets and support its goal of becoming a comprehensive exchange.
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Coinbase Global Inc. announced Monday that it will acquire a derivatives clearinghouse, The Clearing Company, to boost its entry into the growing prediction markets business.
The crypto trading platform said the acquisition would help it expand on its ambitions to become “the Everything Exchange.” It comes just days after Coinbase began rolling out prediction markets and equities trading.
Coinbase already has its own derivatives exchange approved by the Commodity Futures Trading Commission.
Clearinghouses operate critical market plumbing for predictions markets, despite being less visible to the public than exchanges.
The Clearing Company is not yet operational but applied in November for approval from the Commodity Futures Trading Commission to operate a registered clearinghouse.
The startup is notable for using digital ledger technology to clear and settle trades in stablecoins, which can allow for instant settlement.
Its founder, Toni Gemayel, as well as many of The Clearing Company’s executives, are veterans of both Kalshi Inc. and Polymarket, the two dominant players in predictions markets in the US.
Coinbase said the acquisition “adds the specialized talent needed to take this category further.”
Coinbase is currently routing trades through Kalshi, which runs its own clearinghouse. A Coinbase spokesperson said the acquisition doesn’t change any plans with Kalshi.
The Clearing Company recently announced a $15 million seed round led by Union Square Ventures along with Coinbase Ventures and many other investors.