Coinbase, a US-based cryptocurrency exchange, has been granted a license to operate in Bermuda and is reportedly planning to launch a derivatives exchange in the country as early as next week.
In an April 19 blog post, Coinbase announced that it had obtained a regulatory license from the Bermuda Monetary Authority, the nation’s financial regulator. The Class F License under the Digital Asset Business Act allows Coinbase to conduct various activities, including token sales and issuance. It also enables the exchange to operate as a digital asset exchange and a digital asset derivatives exchange provider.
According to an April 19 Forbes report, citing an unnamed source close to the company, Coinbase aims to launch a derivatives exchange in Bermuda as soon as next week.
Also Read: Binance Loses Derivatives License in Australia Following Self-Revocation Request
Bermuda’s Regulatory Environment and Tax Laws
Coinbase chose Bermuda as one of its financial hubs due to the country’s clear regulations. The island’s regulatory environment is known for its rigor, transparency, compliance, and cooperation. Additionally, Bermuda’s tax laws require businesses to pay a payroll tax but have a 0% corporate tax rate, making it an attractive base for companies looking to reduce expenses.
Potential Impact on Coinbase’s US Operations
Some in the crypto community speculate that this development could mark the beginning of the end for Coinbase in the United States. This comes just a day after CEO Brian Armstrong disclosed at a FinTech event in London that the exchange might consider leaving the U.S. due to a lack of regulatory clarity. Armstrong has criticized the U.S. Securities and Exchange Commission (SEC) for not providing clear regulations, driving investors and trading activity overseas.
The latest news is part of Coinbase’s “go broad and go deep” campaign, in which the company aims to establish regulated entities and local operations to facilitate international growth. The company also highlighted its progress in Brazil, Canada, Singapore, Europe, and the United Arab Emirates, adding that its approach globally would be consistent with its approach in the United States.
