Coinbase Expands Into Bermuda, Prepares to Debut Derivative Exchange

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The US-based crypto exchange Coinbase Global Inc has reportedly been granted a regulatory license by the Bermuda Monetary Authority. 

The company gave the announcement in a blog post, and a person close to the firm also said Coinbase is set to launch an offshore derivatives exchange in Bermuda next week.

Coinbase highlighted in the post that it chose Bermuda as an international hub because the country has clear and comprehensive crypto regulations. Notably, Bermuda’s Digital Asset Business Act (DABA), which took effect in 2018, establishes a regulatory framework for digital asset firms operating in the country.

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The License’s Terms

 The Class F license will permit Coinbase to offer its services to residents of Bermuda, including buying, selling, and storing digital assets, in addition to providing custody and exchange services.

Overall, this license is a significant milestone for Coinbase and illustrates its dedication to complying with legal requirements while offering its customers a secure and dependable platform for their digital asset needs.

Reflecting on Coinbase Choice 

While it is impossible to tell for definite what circumstances impacted Coinbase’s choice to open a derivatives platform in Bermuda, it is likely that the regulatory environment played a role in their decision-making process.

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Remarkably, derivatives trading is a complex and highly regulated business, and US regulators have been closely monitoring the derivatives market in recent years.

Additionally, Bermuda’s business-friendly environment, strategic location, and tax perks may have influenced Coinbase’s choice to build a derivatives platform in the country.

Coinbase Pushes for Global Prominence

The company previously said its push toward an offshore derivatives exchange is part of its strategy to accelerate its ‘Go Broad, Go Deep’ international strategy across six continents.

Coinbase said it has upgraded its retail platform for its Singaporean customers, launched a full crypto service in Brazil, and seeking a regulatory license in Abu Dhabi.

Industry Stakeholders Criticize US Regulators

Following the recent financial crisis in the US which resulted in the collapse of some crypto-friendly banks, some stakeholders in the industry have criticized US regulators over their policies and unclear crypto regulations.

For instance, Kraken CEO Jesse Powell said that regulators favor bad industry participants while creating enemies with the good guys.

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