Coinbase Weighing Up Bermuda-Based Derivatives Exchange

Coinbase International Expansion

US-based cryptocurrency exchange Coinbase has received regulatory approval to operate in Bermuda and is reportedly set to launch a derivatives exchange based there as early as next week, according to an anonymous source cited by Forbes.

The license from Bermuda's financial regulator allows Coinbase to engage in a range of activities such as token sales, issuance, and operating as both a digital asset exchange and a digital asset derivatives exchange provider. The move is part of Coinbase's "go broad and go deep" campaign, aimed at establishing regulated entities and local operations to facilitate international growth.

The regulatory environment in Bermuda is known for its high level of rigor, transparency, compliance, and cooperation, which Coinbase cited as a reason for choosing it as one of its financial hubs. Additionally, Bermuda's tax laws include a 0% corporate tax rate, making it an attractive base for firms looking to cut expenses. This could be another incentive for Coinbase to establish a base in the country.

The news comes a day after Coinbase CEO, Brian Armstrong, spoke at a fintech event in London and disclosed that the exchange might consider leaving the US due to a lack of regulatory clarity. Armstrong has been critical of the SEC's failure to provide regulatory clarity on cryptocurrency, arguing that it is driving investors and trading activity overseas.

Coinbase's progress in other international markets was also highlighted in the blog post, with the exchange stating that its approach globally would be consistent with its approach in the US: working with governments and regulators in different markets and always aiming to be the most trusted and compliant crypto company in any market. Coinbase is also making progress in Brazil, Canada, Singapore, Europe, and the United Arab Emirates.

What is Coinbase?

Coinbase is one of the oldest cryptocurrency exchanges in the world. The exchange was founded by Brian Armstrong and Fred Eshram back in 2012. While Armstrong remains at the helm of the exchange as the CEO, Eshram left the company in 2017 but still owns 6% of the equity and serves on the board of directors. Coinbase (COIN) became the first cryptocurrency firm and exchange to trade on Nasdaq starting on April 14, 2021. The stock has even briefly surpassed a market capitalization of $100 billion, although its market cap is just over $15 billion at the time of writing.

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