Coinbase Plans to Launch Offshore Derivative Trading Platform

Amidst so many tensions in the cryptocurrency exchange, American publicly traded company Coinbase is pushing to launch a derivative trading company overseas.

This aligns with Coinbase’s plan to encroach on a sector that is widely dominated by leading digital assets service provider Binance. This intended derivative platform will permit the trade of perpetual swaps linked to cryptocurrencies.

A Coinbase spokesperson confirmed via email that it was part of the company’s expansion strategy. “As shared on our blog, we are accelerating our ‘Go Broad, Go Deep’ international strategy across six continents to better serve our global user base. Our international expansion drive will focus on high-bar regulatory jurisdictions.”

A few market markers and trading firms have been briefed about the offshore derivative trading platform in preparation for its launch; they have also been notified that perpetual swaps will be one of the first products. In the meantime, no exact location has been decided, however, it has been made known that it would be outside the United States.

Trouble in Paradise? U.S. Financial Sector in Turmoil

Coinbase’s decision to launch this platform offshore may be due to the recent crises in the financial sector of the U.S. as well as the heightened scrutiny and regulatory uncertainties on crypto firms in the region. In the last week, news about the implosion and winding up of three U.S banks connected to crypto firms have caused some level of rancor. 

Renowned crypto-friendly financial institution Silvergate Bank began to face some tumult at the beginning of this year stemming from its connection with the bankrupt FTX Derivative Exchange. By the end of January, the crypto-based bank suspended payment of dividends and eventually liquidated its assets and wind down operations a few days ago.

Signature Bank also crashed almost at the same time with crypto firms like Paxos, Celsius Network, and even Coinbase reporting exposure to the bank.

To crown it all, Silicon Valley Bank which has Circle, the issuer of USDC as its customer, imploded and came under the radar of the U.S. authorities. As it stands, the Federal Deposit Insurance Corporation (FDIC) is seeking a buyer for the bank as they have been granted approval to sell off.