Key Takeaways
- The license, a Class F License under the Digital Asset Business Act from the Bermuda Monetary Authority, will enable Coinbase to operate as a digital asset exchange and as a digital asset derivatives exchange provider.
- The latest move is part of the exchange’s “go broad and go deep” campaign.
Coinbase, a US-based cryptocurrency exchange, has secured a regulatory license to operate in Bermuda and plans to launch a derivatives exchange in the island nation as early as next week.
The license, a Class F License under the Digital Asset Business Act from the Bermuda Monetary Authority, will enable Coinbase to operate as a digital asset exchange and as a digital asset derivatives exchange provider. The license permits Coinbase to conduct activities such as token sales and issuance, making Bermuda an attractive hub for the company’s international expansion.
Coinbase chose Bermuda as an international hub due to the island’s world-class leadership in digital asset regulation, transparency, compliance, and cooperation, according to an official blog post by Coinbase posted on April 19.
Bermuda passed full digital asset regulation in 2018, making it one of the first countries to do so. In addition, Coinbase’s offshore derivatives exchange will benefit from Bermuda’s tax laws. Companies operating in Bermuda must pay a payroll tax, but they are not subject to corporate tax, making it an attractive base for firms seeking to reduce expenses.
Coinbase’s latest expansion is part of the company’s “go broad and go deep” campaign, which seeks to establish regulated entities and local operations to facilitate international growth. Coinbase has also made progress in Singapore, Brazil, Canada, the United Arab Emirates, and Europe, the blog post claims.
“Our approach globally will be consistent with our approach in the United States: we will work with governments and regulators in different markets, and will always aim to be the most trusted and compliant crypto company in any market.”
The company aims to serve users globally and will work with governments and regulators in different markets, following a consistent approach with its operations in the US. Coinbase’s move to Bermuda follows a Wells notice from the US Securities and Exchange Commission in March, which the company received owing to the SEC’s concerns over its Lend product.
The company had earlier also had disputes with the Commodity Futures Trading Commission in 2021 and with the New York Department of Financial Services in January, which are both now settled.
Coinbase CEO Brian Armstrong had also recently expressed frustration over the lack of regulatory clarity for the crypto industry in the US, arguing that it has driven investors and trading activity overseas. Armstrong also suggested that Coinbase could consider leaving the US to operate in the UK due to regulatory challenges.
Coinbase is, however not the only leading crypto expansion to focus on global expansion. Earlier this week, Kraken registered with the Central Bank of Ireland (CBI) as a Virtual Asset Service Provider (VASP).
