The largest crypto exchange in the United States, Coinbase, has established Coinbase International Exchange, an offshore crypto-derivatives market. The exchange is situated in Bermuda, where Coinbase holds a business licence.
The exchange will allow non-US institutional traders who meet certain criteria to trade in crypto perpetual futures, a sort of derivative instrument with no expiration date.
The US Commodity Futures Trading Commission (CFTC) does not oversee crypto perpetual futures, and they are not permitted in the US market.
Coinbase’s decision to open an overseas exchange coincides with increased regulatory scrutiny and uncertainty in the US cryptocurrency business. Coinbase CEO Brian Armstrong has expressed frustration with US authorities and warned that the business may relocate if the situation does not change.
Coinbase International Exchange will initially be available simply through API, with no dedicated app or website for users.
The exchange will allow perpetual futures trading for Bitcoin and Ethereum with up to 5x leverage that will be settled in USD Coin (USDC), Circle’s stablecoin. Perpetual futures trading accounted for about 75% of worldwide crypto exchange traffic in 2022, according to Coinbase.
According to Coinbase, the international exchange will bring more possibilities and liquidity to its clients while also encouraging innovation and growth in the global crypto ecosystem.
Coinbase is one of many crypto exchanges that are looking offshore for expansion. Other platforms, such as Bittrex and Binance, have also faced regulatory challenges and moved some of their operations to more crypto-friendly jurisdictions.
Also Read: Coinbase Responds to SEC’s Wells Notice
