Monday, May 20, 2024

Coinbase gets Bermuda license, plans to launch offshore exchange in coming weeks


Coinbase has received a license to operate in the offshore haven of Bermuda, indicating that the company is doubling down on plans to grow its international business at a time when US regulators have turned hostile towards the crypto industry.

The company revealed in a blog Post on Wednesday that it had received a license from the Bermuda Monetary Authority, the island nation’s unified financial regulator, which was one of the first in the world to create a comprehensive legal framework for digital assets in 2018.

Coinbase plans to launch an offshore derivatives exchange in Bermuda as soon as next week, according to a person close to the company.

the news is like this reports It was reported by Bloomberg in March that Coinbase Global is approaching institutional clients about a new offshore trading platform, and is working with market makers and investment firms to launch such a service in addition to its primary Coinbase marketplace. Block soon cited multiple sources Reporting that “perpetual swaps – a futuristic and popular product of sorts in the crypto space – will be one of the offerings.”

Perpetual swaps and other overseas crypto-related derivatives make up a large portion of daily trading activity, but are for the most part unavailable in the US due to regulatory strictures.

By launching an offshore exchange in Bermuda, San Francisco-based Coinbase will be better prepared to challenge Binance, which dominates global crypto trading, and to diversify its revenue base.

A Coinbase spokesperson said in response to a request for comment. Luck In a Wednesday blog post, it also revealed plans to expand operations in Abu Dhabi as part of a strategy it calls “Go Broad and Go Deep”.

The news of the Bermuda license comes a day after Coinbase CEO Brian Armstrong warned that crypto firms could seek to relocate offshore in the US in the absence of a clear regulatory framework.

It is unlikely that Coinbase has immediate plans to leave the US, as it has touted its record of compliance in its home country for years, and is widely regarded by politicians and regulators as law abiding. Another large US company, Ripple, issued a similar warning that it may increase its stake in 2021, but has yet to follow through.

But even though an immediate exodus of large US crypto companies is unlikely in the near future, Coinbase’s move to set up shop in Bermuda shows that the industry is increasingly looking to places like Hong Kong, Dubai and Singapore – all of which All have touted themselves as the crypto hub—as the industry’s primary place of business.

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