SEC Approves Binary Options Linked to Public Company Metrics, Coinbase and MARA

Introduction

The SEC has approved standardized binary options that pay a predetermined cash amount if a specified company performance condition is met, including conditions tied to Coinbase trading volume and MARA Bitcoin production.

What Does the SEC Approval Mean?

In an October 13 statement, SEC Chairman Paul Atkins said the Commission had approved a securities-exchange rule change covering standardized options linked to key performance indicators reported by public companies. The contracts are European-style, exercisable only at expiration, and settle in cash; their payout depends on whether a specified metric satisfies the condition set out in the contract.

Company Metrics and Binary Options

Coinbase-linked indicators include trading volume, transaction revenue, total revenue, subscription and services revenue, and diluted net income per share. A contract would turn on whether the company’s reported figure meets the specified condition for a reporting period, not on whether COIN shares or Bitcoin rise or fall.

MARA Bitcoin Production

For MARA, the covered measure is Bitcoin production, tying the contract to mining output rather than BTC’s market price. The contract also includes Robinhood customer activity and revenue measures, extending the product concept beyond crypto-native businesses.

Conclusion

The approved products are classified as National Market System securities and would trade under existing standardized-options rules. The SEC’s handling of a proposed Lido-related ETF likewise illustrates how product design and securities-law treatment can shape what issuers can bring forward.