Coinbase, the leading cryptocurrency exchange, has launched a Bermuda-based marketplace to cater to non-US institutional users, as the company has been exploring other countries for relocation due to regulatory hurdles in America. CEO Brian Armstrong has held discussions with the British authorities, suggesting that the UK could be an expansion target for Coinbase.
Disappointment in the US
Coinbase has been on a mission to roll out its operations outside the US due to the regulatory uncertainty that remains a concern in the country, even though it remains committed to the US. It obtained approval from the Bermuda Monetary Authority in April to establish an offshore derivatives marketplace in the region. According to a recent press release, Coinbase’s International Exchange is already available to non-American institutional clients, allowing users to speculate on the price movements of major cryptocurrencies by market capitalization without owning them through trading bitcoin and ether perpetual futures.
Coinbase believes that other countries have recognized the potential of the crypto industry and imposed pertinent rules on it. The firm stated that it would like to see the US take a similar approach instead of regulation by enforcement, which has led to a disappointing trend for crypto development in the US.
CEO Armstrong considers the States a key market for the digital asset sector but believes the local regulatory chaos could push numerous crypto entities outside the region. Apart from Bermuda, Coinbase has set eyes on Europe and, more specifically, the United Kingdom. Armstrong even met with Andrew Griffith, the economic secretary to the UK Treasury and Member of Parliament, and said his organization is “excited” to keep investing in the area.
Gemini, another crypto exchange, has also disclosed expansion plans outside the US and established a new engineering hub in Gurgaon, India.
Coinbase’s Issues in the US
The United States Securities and Exchange Commission (SEC) is causing many of Coinbase’s problems in its homeland. It launched an investigation in 2022, alleging that some of the digital currencies listed on the platform are unregistered securities. The watchdog issued a Wells Notice against Coinbase in March this year, which could be connected to the company’s Earn, Prime, and Wallet products. Armstrong seems not worried about the charges, stating that the company is confident in the facts and welcomes the opportunity for Coinbase and the broader crypto community to get before a court.
The firm took legal action against the SEC last week, asking a federal judge to force the agency to answer a months-old petition about whether it would allow certain crypto regulations. Coinbase urged the regulator in 2022 to “propose and adopt rules to govern the regulation of securities that are offered and traded via digitally native methods, including potential rules to identify which digital assets are securities.”