Coinbase gets Bermuda license, plans to launch offshore derivatives exchange next week
Coinbase has obtained a license to operate in the offshore jurisdiction of Bermuda. The move indicates that the company is doubling down its efforts to expand its global operations, particularly at a time when the U.S. regulatory agencies have become hostile towards the cryptocurrency industry.
The news comes just a day after Coinbase CEO Brian Armstrong said he’s not ruling out leaving the entire US market altogether if no regulatory clarity emerges from the US regulators. The exchange has been in a legal tussle with the U.S. Securities and Exchange Commission (SEC) has been going on for at least a year.
“Coinbase Bermuda Ltd. has obtained a Class F License under the Digital Asset Business Act from the Bermuda Monetary Authority (BMA). Bermuda was one of the first financial centers to pass comprehensive digital assets regulation in 2018, and its regulatory environment is long known for a high level of rigor, transparency, compliance, and cooperation. Bermuda was chosen as one of our international hubs as the BMA is a highly respected and experienced financial regulator that is led by a world-class executive team and board of directors. The BMA is also a member of several international organizations and maintains close relationships with other regulatory agencies around the world,” the blog post reads.
Coinbase’s launch of an offshore exchange in Bermuda would position it to compete more effectively with Binance, which is the dominant player in global cryptocurrency trading. Additionally, it would aid in the expansion of Coinbase’s revenue streams.
In March, Bloomberg reported that Coinbase Global had been reaching out to institutional clients regarding a new offshore trading platform. The company collaborated with market makers and investment firms to establish a separate service from its main Coinbase marketplace. Following this, The Block stated that “Perpetual swaps,” a popular product in the crypto sector and a type of future, would be among the services provided, citing several sources. The latest announcement is consistent with this move.
Cooinbase was founded in 2012 by Brian Armstrong and Fred Ehrsam. The San Francisco, California-based Coinbase is a digital currency wallet and platform where merchants and consumers can transact with new digital currencies like Bitcoin, Ethereum, and Litecoin.