Coinbase Bags Bermuda License, Set to Launch Offshore Derivatives Exchange Soon: Report


Leading American cryptocurrency exchange Coinbase has secured a regulatory license from the Bermuda Monetary Authority (BMA) to offer financial services in the country and is set to launch a derivatives exchange in the region soon.

Coinbase Obtains Bermuda Regulatory License

According to a blog post, Coinbase sought the Digital Asset Business Act from the BMA due to the country’s regulatory approach to the crypto sector. Bermuda was one of the first financial centers to release clear crypto regulations in 2018 and is currently known for its transparent, compliant, and cooperative regulatory environment.

“Bermuda was chosen as one of our international hubs as the BMA is a highly respected and experienced financial regulator that is led by a world-class executive team and board of directors. The BMA is also a member of several international organizations and maintains close relationships with other regulatory agencies around the world,” the exchange said.

In addition, people familiar with the matter told Fortune that Coinbase intends to launch a derivatives exchange in Bermuda as soon as next week. The development follows reports that the crypto exchange has been in contact with institutional customers, market makers, and investment firms about establishing a new offshore trading platform.

Coinbase Expands Offshore

Coinbase’s move toward Bermuda aligns with the expansion of its international business through a “Go Broad & Go Deep” strategy. Bermuda’s regulatory environment differs from that of the US, which has yet to provide clear rules for the crypto sector or even decide if crypto assets are commodities or securities.

Over the years, the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have engaged in a regulatory turf over who is to oversee the crypto industry. Both have issued contradictory rules and statements that have confused market participants and driven them out of the country.

The exchange’s CEO Brian Armstrong recently stated during a conference at the Fintech week in London that crypto firms are most likely to develop in offshore havens if the US and the UK fail to provide regulatory clarity for the industry.

Meanwhile, Coinbase has extended its crypto services to other regions besides Bermuda, including Singapore, Brazil, Canada, Dubai, and Europe.