The U.S. Securities and Exchange Commission has approved the listing of binary options tied to corporate performance metrics, allowing investors to trade contracts based on figures such as Coinbase’s trading volume and Bitcoin production by mining companies.
Summary
- The SEC has approved binary options tied to corporate performance metrics, including Coinbase trading volume, MARA Bitcoin production and Robinhood financial data.
- The contracts will settle in cash at expiration and remain subject to existing securities exchange rules covering margin requirements, trading halts and market makers.
- Investors can take positions on whether specified company performance targets will be met, with fixed payouts determined by the terms of each contract.
- SEC Chairman Paul Atkins said the approval applies only to the specified exchange traded contracts and does not restrict CFTC oversight of differently structured products.
In an October 13 statement, SEC Chairman Paul Atkins said the Commission had voted to approve a securities exchange rule change covering standardized options linked to key performance indicators reported by publicly traded companies.
The contracts allow traders to take positions on whether a specified financial or operational target will be met. Each binary option pays a predetermined amount when its conditions are satisfied, with settlement taking place in cash at expiration.
Companies covered by the proposal include Coinbase, Robinhood and Bitcoin miner MARA, placing several cryptocurrency businesses among the issuers whose reported performance can serve as the basis for the contracts.
SEC approval covers Coinbase trading volume and mining metrics
Coinbase’s eligible performance indicators include total trading volume, transaction revenue, total revenue, subscription and services revenue, and diluted net income per share.
Investors could use the new contracts to trade on whether the exchange reports figures above or below specified thresholds during a given reporting period.
For Bitcoin miner MARA, the covered indicators include Bitcoin production, allowing contracts to reference operational results instead of the market price of Bitcoin itself.
Robinhood’s customer activity and revenue figures are among the performance measures available for similar contracts.
Unlike ordinary stock options, which generally derive their value from the price of an underlying security, the approved binary options reference reported company metrics.
A contract tied to Coinbase’s quarterly trading volume, for example, would depend on whether the company reports a figure that satisfies the contract’s specified condition.
The exchange would determine the relevant thresholds and contract terms under its approved listing rules. Traders would receive the fixed payout if the condition was met, while contracts that failed to meet the condition would expire without that payout.
Under the approved structure, the options are European style, meaning they can be exercised only at expiration.
The products are classified as National Market System securities and will trade on a regulated securities exchange under rules governing standardized options.
Binary KPI options remain subject to securities protections
The SEC’s approval requires the new products to operate within the existing securities exchange framework.
According to Atkins, the contracts will be listed and traded in substantially the same manner as conventional standardized options already available on securities exchanges.
Exchange rules governing customer accounts and margin requirements will apply to the products, alongside procedures covering trading halts and auction mechanisms.
Market makers will operate under exchange appointment and quoting requirements, while orders will be subject to existing rules for order types, execution instructions and time-in-force conditions.
Atkins said the application of these rules provides core investor protections under federal securities laws.
The regulatory treatment means that the contracts will not operate as unrestricted wagers on company performance. They will instead be subject to the exchange’s approved rules and the securities regulations applicable to their structure.
The SEC’s decision concerns the listing and trading of specified contracts. It does not authorize every possible financial product tied to the same company indicators.
SEC decision leaves CFTC authority over other contracts intact
Although the SEC has approved the specified KPI options, the agency has not ruled on contracts using identical performance indicators under different legal structures.
Atkins said the approval order applies solely to the particular standardized options traded on a securities exchange that complies with federal securities laws.
Products designed to fall under the Commodity Futures Trading Commission’s jurisdiction remain outside the scope of the decision.
In February, Atkins had raised the question of SEC oversight for certain prediction markets during a Senate Banking Committee hearing, as crypto.news previously reported.
At the hearing, he described prediction markets as an area where the two federal regulators could have overlapping authority. He said the legal treatment of individual products could depend on how their contracts were structured.
Regulatory boundaries became the subject of a joint SEC and CFTC consultation in June, when the agencies requested public feedback on definitions covering swaps, security-based swaps and related derivatives.
The consultation examined existing exclusions, products potentially subject to both agencies and questions concerning regulatory compliance.
More recently, the CFTC submitted two prediction market rules for White House review on September 28.
One proposal would define swaps to include event contracts, while a separate interim final rule would exclude casino-style gambling products.
Atkins addressed the agencies’ history of jurisdictional disagreements in his October 13 statement, saying the disputes had prevented certain financial products from reaching U.S. markets.
He described the SEC’s latest approval as part of a new approach based on regulatory cooperation and investor choice.
Coinbase and MARA financial results provide reference points
Corporate performance figures covered by the approved contracts are already disclosed through companies’ financial and operational reports.
Coinbase reported a second-quarter 2026 net loss of $359.5 million, while total revenue fell 18.5% from a year earlier to $1.22 billion.
Despite the decline in revenue, the exchange’s share of global crypto trading reached 10.3%, compared with 9.1% in the preceding quarter, according to its July 31 earnings coverage.
The figures illustrate the types of reported company data that can be referenced by KPI contracts, although the SEC approval does not establish a specific trading threshold based on those results.
MARA’s operational figures provide another set of measurable indicators.
In its August 6 second-quarter earnings release, the Bitcoin miner reported production of 2,422 BTC, up 3% from a year earlier.
The company recorded $174.9 million in revenue and a $611.3 million net loss during the quarter. Its Bitcoin holdings stood at 35,577 BTC at the end of June, following a 29% year-over-year decline.
MARA reported an energized hashrate of 70.3 EH/s during the same period and sold 2,213 BTC.
The approved options framework allows exchanges to develop contracts referencing specified reported indicators, subject to the terms and conditions permitted under their rules.
Atkins said the SEC’s order does not prevent the CFTC from exercising its authority over contracts tied to the same corporate data when those products are structured under commodities law.
