Coinbase Obtains License To Operate In Bermuda• April 20, 2023 4:31 pm • Comments
As the regulatory pressure within the United States continues to grow, Coinbase has been looking to diversify its operations to overseas.
It was just revealed that the exchange was granted a license to operate in Bermuda which will allow Coinbase to provide services such as selling, issuing, or redeeming digital assets.
Bermuda was likely chosen due to the fact that it is a financial center that is known for transparency, cooperation, and for tax benefits.
This is not the only area that Coinbase is looking to expand into as the company also has plans to setup an offshore derivatives exchange in the British Overseas Territory.
The operation would allow for the the firm to provide services related to perpetual swaps and other crypto derivatives that are currently not allowed in the US due to regulations.
Great job, Gary. https://t.co/33hAo1Qw0V
— The Wolf Of All Streets (@scottmelker) April 19, 2023
In an attempt to seek out alternative revenue streams outside of the US, Coinbase’s move can be viewed as an attempt to challenge existing rivals such as Binance — the world’s largest exchange by spot trade volume.
Binance also tops the list for the derivatives market, far outstripping other exchanges including Bybit, OKX, Bitget, CME and Huobi, Coinglass data shows.
CEO Brian Armstrong flagged intentions last year to seek sources that did not rely solely on trading activity, particularly when the markets soured, as seen in recent times.
The exchange faces far greater pressures on home soil, particularly after an entanglement with the securities regulator that has recently sent Coinbase a Wells notice, a precursor to suing the firm.
Coinbase already has a reputation for being one of the most compliant crypto exchanges within the United States, but even this is not enough to prevent it from being a target of the SEC.
Therefore, the fact that even Coinbase needs to look overseas indicates how much of an obstacle the SEC is to the crypto industry’s growth.
Recently, CEO Brian Armstrong had mentioned that “anything was on the table” as a response to speculators asking if Coinbase would relocate outside of the US.
Of course, nothing is confirmed yet, but the answer certainly presented the scenario as a very real possibility in the future.
Other regions that Coinbase is also looking at include the regions of Brazil, Canada, and Abu Dhabi.
UPDATE: @coinbase makes first move to ‘offshore’; planning a derivatives exchange in Bermuda as soon as next week.
**rather than fight an entire regulatory regime hellbent on ruining their business, this looks/feels like a ‘Plan B’.
— Andrew (@AP_Abacus) April 19, 2023
For now, it is not clear what services Coinbase will offer in Bermuda.
“While we are excited to partner with the BMA, and to have successfully attained the Class F License in this high-bar regulatory jurisdiction, nothing to announce today regarding our future plans to offer services through this license,” a spokesperson told CoinDesk.
As part of what the exchange calls its “8-week international expansion drive,” Coinbase in its blog post took note of, among other items, doubling down on its investments in the Canadian market.
The company recently hired Lucas Matheson as country director and signed a Pre-Registration Undertaking (PRU), which is considered a stepping stone on the way to becoming a registered exchange in Canada.
— CoinDesk (@CoinDesk) April 20, 2023
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