SEC Clears KPI-Linked Binary Options, Opening Trading on Coinbase Volume

The U.S. Securities and Exchange Commission has approved exchange listings for binary options tied to companies’ key performance indicators, opening the door to trading directly on corporate performance such as Coinbase’s trading volume or a Bitcoin miner’s output.

In a statement on Oct. 13, SEC Chair Paul Atkins said the agency had approved a rule change allowing securities exchanges to list and trade such products. Binary options pay a fixed amount if a specified condition is met. The newly approved contracts can be exercised only at expiration and are cash-settled.

The covered companies include crypto-related firms such as Coinbase, Robinhood and Bitcoin miner MARA. Investors can take yes-or-no positions on whether Coinbase’s trading volume, MARA’s Bitcoin production, or Robinhood’s customer and revenue metrics meet specified conditions.

The trades will be subject to investor protections similar to those used for traditional securities options. Exchange rules covering customer accounts and margin management, trading halts and order handling will apply. Market makers will also be required to provide bid and ask quotes.

The SEC said the approval is limited to specific contracts traded on the relevant securities exchange. It does not amount to blanket approval for all products using the same KPIs if they are structured differently. For contracts designed to fall under the jurisdiction of the Commodity Futures Trading Commission, the SEC said the CFTC’s oversight authority remains intact.

Atkins said decades of jurisdictional disputes between the SEC and the CFTC had held back innovation. He said the approval reflects a new approach centered on regulatory harmonization, innovation and broader investor choice.