LMX Labs, LLCd/b/a Coinbase Derivatives

June 13, 2023

VIA CFTC Electronic Portal

Mr. Christopher J. Kirkpatrick

Secretary of the Commission

Office of the Secretariat

Commodity Futures Trading Commission

Three Lafayette Centre

1155 21st Street, NW

Washington, DC 20581

Re: CFTC Regulation 40.6(a) Certification: Modifications to the Broker

Rebate Program

Coinbase Derivatives Submission #2023-8

Dear Mr. Kirkpatrick:

Pursuant to Commodity Futures Trading Commission (“CFTC” or “Commission”) Regulation

40.6(a), LMX Labs, LLC, d/b/a Coinbase Derivatives (the “Exchange”) hereby submits for

self-certification a renewal of its broker rebate program (the “Program”). The modifications to the

Program will become effective on July 1, 2023.

Exhibit A sets forth the terms of the Program. Modifications appear below, with additions

underlined and deletions stricken-through.

Compliance with Core Principles

The Exchange has reviewed the designated contract market (“DCM”) core principles (“Core

Principles”) set forth in the Commodity Exchange Act and the CFTC rules thereunder and has

identified the following Core Principles that may be directly implicated by Program:

Core Principle 2 – Compliance with Rules and Core Principle 4 – Prevention of Market Disruption

All trading on the Exchange, including any trading and related activity by Participants under the

Program, is subject to the LMX Labs Rulebook (the “Rulebook”) including Chapter 5, which

prohibits fraud, non-competitive trading, market manipulation and abusive and disruptive trade

practices. Capitalized terms not otherwise defined herein are defined in the Rulebook. Additionally,

as with all trading on the Exchange, trading in the Program’s products will be subject to monitoring

and surveillance by the Market Regulation Department, which has the authority to investigate and

enforce Exchange rules, as described in Chapter 7.

FOIA CONFIDENTIAL TREATMENT REQUESTED BY LMX LABS LLC PURSUANT TO 17 C.F.R. PART 145
Core Principle 9 – Execution of Transactions

The Program’s products are listed for trading on the Exchange’s trading system, which provides for

efficient, competitive, and open execution of transactions pursuant to the Exchange Rulebook.

Core Principle 12 – Protection of Markets and Market Participants

Chapters 4 and 5 of the Rulebook require all market participants, including those participating in

the Program, to observe high standards of integrity, market conduct, commercial honor, fair

dealing, and just and equitable principles of trade and prohibits, among other things, fraud,

non-competitive trading, market manipulation, and abusive and disruptive trade practices. As with

all contracts traded on the Exchange, trading in the Program’s products will be subject to

monitoring and surveillance by the Market Regulation Department and compliance with the

Program will be monitored and enforced by the Exchange.

Core Principle 18 – Recordkeeping

Records related to the Program will be maintained by the Exchange in compliance with its

recordkeeping policies and the requirements of the Commodity Exchange Act and CFTC Rules.

Certification

The Exchange is not aware of any substantive opposing views to the Program. The Exchange

certifies that the Program complies with the Commodity Exchange Act and the rules and

regulations promulgated thereunder.

The Exchange certifies that this submission has been concurrently posted on the Exchange’s

website at: https://www.coinbase.com/derivatives/filings.

If you have any questions or require further information, please contact the undersigned at

Jane.Downey@coinbase.com.

Sincerely,

/s/ Jane Downey

Chief Regulatory Officer

Attachment: Exhibit A

FOIA CONFIDENTIAL TREATMENT REQUESTED BY LMX LABS LLC PURSUANT TO 17 C.F.R. PART 145
EXHIBIT A

Broker Rebate Program

(additions underlined; deletions stricken-through)

Program Purpose

The purpose of the Broker Rebate Program (the “Program”) is to support the development of the

products listed below by increasing liquidity in the Exchange’s central limit order book and,

therefore, benefit all Participants in the market.

Product Scope

All nano-sized cryptocurrency futures contracts available for trading on the Exchange.

Eligible Participants

There is no limit to the number of participants in the Program. The Program is open to

CFTC-registered introducing brokers (“IBs”) and futures commission merchants (“FCMs”) that

have active direct retail customers; are capable of providing their customers access to Exchange

products; promote the Exchange products to its customers, through marketing, sales, and

commercial initiatives; agree to provide the Exchange with evidence of such promotional activity;

complete and submit an application form to the Exchange; and comply with such other criteria as

the Exchange deems appropriate and necessary. Participants shall disclose their participation in this

Program to their customers in writing. The Exchange may add or subtract from the aforementioned

criteria as it deems necessary.

Program Term

The initial term of the Program shall begin on June 1, 2023 January 1, 2023 and shall end on

December 31, 2023 June 30, 2023, unless otherwise extended by the Exchange.

Obligations

[REDACTED]

Monitoring and Termination of Status

The Exchange retains the right to revoke a Participant’s status in the Program or terminate the

Program at any time at its sole discretion.

FOIA CONFIDENTIAL TREATMENT REQUESTED BY LMX LABS LLC PURSUANT TO 17 C.F.R. PART 145