Lynn Johannson, Advisor, Sustainability and ESG
January 4th, 2024
Lynn Johannson, President of E2 Management Corporation and Catalyst for THE Collaboration
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Coinbase Secures Bermuda License and Plans to launch Derivatives Exchange
Fortune | Jeff John Roberts | Apr 19, 2023
Image: Wikipedia, Brian Armstrong, CEO, Coinsquare
Coinbase's disclosure that it's received a license to operate in Bermuda comes at a time when the U.S. crypto industry is exploring offshore alternatives.
- The news follows a report by Bloomberg in March that Coinbase Global has been contacting institutional customers about a new offshore trading platform, and working with market makers and investment firms to launch such a service apart from its primary Coinbase marketplace.
- The news of the Bermuda license comes a day after Coinbase CEO Brian Armstrong warned that crypto firms may seek to relocate offshore in the absence of a clear regulatory framework in the U.S.
- Coinbase plans to launch an offshore derivatives exchange in the country as early as next week, according to an anonymous source. The exchange will reportedly offer perpetual swaps and other exotic crypto derivatives that are mostly unavailable in the US due to regulatory restrictions.
- The move will allow Coinbase to diversify its revenue base and challenge Binance's dominance in the global crypto trade. Coinbase also plans to expand its operations in Abu Dhabi as part of its "Go Broad & Go Deep" strategy.
See: Coinbase and Kraken Reaffirm Plans to Stay Operational in Canada Amidst Changing Regulatory Landscape
- Should we stay or should we go now: The crypto industry is increasingly considering locations such as Hong Kong, Dubai, and Singapore as primary business locations. This news came after Coinbase CEO Brian Armstrong warned that crypto firms may seek to relocate offshore in the absence of a clear regulatory framework in the US. However, it is unlikely that Coinbase has immediate plans to leave the US given its history of compliance in its home country.
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