San Francisco-based cryptocurrency exchange Coinbase has announced that it has obtained a license in Bermuda and plans to launch its derivatives exchange in the coming weeks.
The license granted by the Bermuda Monetary Authority is believed to better prepare Coinbase for global crypto trading and also opens the doors to challenging other crypto exchanges like Binance.
Coinbase’s plans include offering perpetual swaps and other exotic derivatives related to cryptocurrencies. However, due to regulatory restrictions, these products cannot be used in the United States. Therefore, by opening an offshore derivatives exchange in Bermuda, Coinbase will have the opportunity to offer such products.
“Crypto companies will want to move to offshore locations while there is no clear regulatory framework for them in the US. Opening a stock exchange in Bermuda shows that the sector is increasingly looking to places such as Hong Kong, Dubai, and Singapore.”Brian Armstrong, CEO of Coinbase
Another important point is:
Coinbase had previously announced that it was considering leaving the US if the regulatory approach did not change. At a fintech event held in London, Coinbase CEO Brian Armstrong was asked if the company was considering moving its headquarters to the UK, to which he replied that they were evaluating the possibilities. Armstrong also spoke about regulations during the event.
“The US has the potential to be a significant market in the crypto sector. However, we currently need regulatory clarity. If regulatory clarity does not emerge in the US within the next few years, we may need to consider investing more in other regions of the world.”Brian Armstrong, CEO of Coinbase
Is Coinbase leaving the US?
At the moment, completely leaving the US is not on the table for the company, as the US is an important market for Coinbase and the company has many customers operating in the US. However, opening an exchange in Bermuda is seen as a way to expand its international business and become more competitive in the global market.
Additionally, it is known that Coinbase is also operating in the Netherlands, Italy, Germany, France, and Spain.
Coinbase’s move comes at a time when US regulators have officially declared war on cryptocurrencies. In March of last year, Coinbase received a warning letter from the US Securities and Exchange Commission (SEC), and following the opening of trading, Coinbase’s stock prices experienced significant drops. This event is known to have played a role in accelerating Coinbase’s efforts to work with other countries.
To learn more about Coinbase’s warning letter, you can read the following article.