Coinbase Expands To Bermuda, Launching Offshore Derivatives Exchange Next Week

Key Points:

• Coinbase has received a license to operate an offshore derivatives exchange in Bermuda as early as next week.
• The move comes as U.S. regulators become increasingly hostile to the crypto industry.
• By expanding into Bermuda, Coinbase is challenging Binance, which dominates the global crypto trade, and diversifying its revenue base.

On Wednesday, Coinbase announced that it had received a license from the Bermuda Monetary Authority to operate in Bermuda.

According to a person close to the company, this license will allow Coinbase to launch an offshore derivatives exchange in the country as early as next week.

This move comes as U.S. regulators have become increasingly hostile to the crypto industry. By expanding into Bermuda, Coinbase is challenging Binance, which currently dominates the global crypto trade, and diversifying its revenue base.

Launching an offshore exchange in Bermuda will enable Coinbase to offer its customers perpetual swaps and other exotic crypto-related derivatives that make up a significant portion of daily trading activity but are largely unavailable in the U.S. due to regulatory restrictions.

The decision to establish a presence in Bermuda coincides with a statement by the company’s CEO, Brian Armstrong, that crypto companies may consider relocating offshore due to the lack of a clear regulatory framework in the United States. While it is unlikely that Coinbase has current plans to exit the U.S., the move to Bermuda suggests that the cryptocurrency sector is increasingly looking at locations such as Hong Kong, Dubai, and Singapore as the primary business hubs.

The exchange also plans to expand operations in Abu Dhabi as part of its “Go Broad & Go Deep” strategy.

The move to Bermuda will allow Coinbase to increase its international business while offering its customers more products. However, the regulatory environment in the crypto industry remains uncertain, and it is unclear how U.S. regulators will respond to this expansion into offshore markets.

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