Leading U.S. cryptocurrency exchange Coinbase has secured a regulatory license to operate in Bermuda and is expected to launch a derivatives exchange based there in the coming week, according to a recent blog post.
The Class F license, which was granted by Bermuda’s financial regulator, the Bermuda Monetary Authority, permits Coinbase to operate as a digital asset exchange as well as a digital asset derivatives exchange provider. The exchange cited Bermuda’s clear regulatory environment and a long-standing reputation for rigor, transparency, compliance, and cooperation as the reasons for its selection.
The move is part of Coinbase’s “go broad and go deep” campaign to expand internationally by establishing regulated entities and local operations. In addition to Bermuda, the exchange is making progress in Brazil, Canada, Singapore, Europe, and the United Arab Emirates.
However, some in the crypto community see the latest move as a signal that Coinbase may be preparing to leave the U.S. due to a lack of regulatory clarity. CEO Brian Armstrong recently disclosed at a fintech event in London that the exchange may consider leaving the U.S. market, which he believes has failed to provide regulatory clarity, and is driving investors and trading activity overseas. Armstrong’s previous statements regarding the state of crypto regulations in the U.S. were similarly critical, arguing that the Securities and Exchange Commission had failed to provide the necessary regulatory clarity.
Coinbase’s decision to operate from Bermuda also has tax advantages. The country has a corporate tax rate of 0%, which means businesses operating there are exempt from paying taxes on their profits, making it an attractive destination for firms looking to cut costs.
Coinbase plans to launch a derivatives exchange in Bermuda next week, according to Forbes. The exchange has received a license to operate in the country, allowing for activities such as token sales and issuance.
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