2024-06-21
Business Global News

Coinbase gets Bermuda license, offshore exchange could launch next week: Report

It’s reported that the United States-based crypto exchange is planning to quickly launch a derivatives exchange based in the island nation.

United States-based cryptocurrency exchange Coinbase has received a license to operate in Bermuda and is reportedly set to launch a derivatives exchange based there as soon as next week.

According to an April 19 blog post, Coinbase revealed it had “received our regulatory license to operate from the Bermuda Monetary Authority” — the nation’s financial regulator.

The license, a Class F License under the Digital Asset Business Act, allows Coinbase to conduct a range of activities such as token sales and issuance. It also permits it to operate as both a digital asset exchange and as a digital asset derivatives exchange provider

An April 19 report from Forbes citing “a person close to the company” claimed Coinbase is planning to launch a derivatives exchange in Bermuda as soon as next week.

Coinbase cited clear regulations as the reason why Bermuda “was chosen as one of our financial hubs” and explained its regulatory environment “is long known for a high level of rigor, transparency, compliance, and cooperation.”

Some from the crypto community believe the latest development could be the beginning of the end for Coinbase in the United States, as it came 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 been very vocal about his opinion on the state of crypto regulations in the U.S., arguing in November last year that the Securities and Exchange Commission had failed to provide regulatory clarity and is driving investors and trading activity overseas

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One other clear benefit of a Bermuda-based exchange is its tax laws. Businesses operating in Bermuda are required to pay a payroll tax, but it has a corporate tax rate of 0% meaning profits are tax-free, making it an attractive base for firms looking to cut expenses.

Related: Coinbase’s Base network gets OpenZeppelin security integration

The latest development is an update to Coinbase’s “go broad and go deep” campaign that sees it seeking to “establish regulated entities and local operations” to facilitate international growth.

It also shed light on its progress in Brazil, Canada, Singapore, Europe and the United Arab Emirates, adding:

“Our approach globally will be consistent with our approach in the United States: we will work with governments and regulators in different markets, and will always aim to be the most trusted and compliant crypto company in any market.”

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Source : Cointelegraph.com