Coinbase, one of the largest cryptocurrency exchanges in the world, has launched an offshore derivatives exchange in Bermuda. The move comes as the US government continues its crackdown on crypto trading and regulation.
The newly launched Coinbase International Exchange will allow non-US customers to trade perpetual futures, which are contracts that allow traders to speculate on the price of cryptocurrency without owning the underlying asset. The exchange will be based in Bermuda, a jurisdiction known for its favorable tax laws and business-friendly regulations.
The Bermuda Monetary Authority has granted a regulatory license to Coinbase, giving the exchange the green light to offer its services to customers outside the US. According to a blog post by Coinbase, the new exchange will provide users with access to a range of trading pairs, including Bitcoin, Ethereum, and Litecoin.
The launch of Coinbase International Exchange comes as US regulators are cracking down on the crypto industry. In recent months, the Securities and Exchange Commission (SEC) has stepped up its enforcement actions against companies that offer unregistered securities, and the Internal Revenue Service (IRS) has issued new guidelines for reporting cryptocurrency transactions.
Coinbase has been at the forefront of the crypto industry’s push for regulation, and the company has worked closely with regulators in the US and other countries to develop a framework for crypto trading. The launch of the new offshore exchange is seen as a way for Coinbase to expand its business while avoiding the regulatory hurdles in the US.
However, the move has also raised concerns about the potential for regulatory arbitrage, where companies move their operations to jurisdictions with looser regulations to avoid compliance with stricter rules in their home countries. It remains to be seen how regulators in the US and other countries will respond to the launch of the new exchange.
