After dispute with the SEC: Coinbase launches international derivatives exchange

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Forex in this article

• US authorities crack down on crypto companies
• Coinbase plans international futures exchange
• International growth strategy or even emigration from the USA?

Due to the recent numerous scandals in the crypto industry – above all the FTX bankruptcy – the topic of regulation has once again become significantly more important. Coinbase, the largest US-based crypto exchange, has also been targeted by the US Securities and Exchange Commission for its staking activities. The company allegedly violated federal securities laws by illegally distributing unregistered securities.

Coinbase is just one of many crypto companies, because the SEC is taking the entire industry into its crosshairs after the recent scandals. In most cases, the accusation is illegal securities trading. Securities can only be legally sold to the public if the issuer registers with the Securities and Exchange Commission (SEC) and adheres to strict disclosure requirements.

As expected, this has met with great criticism in the crypto community: “We are seeing crypto companies fleeing the United States,” warned Jeremy Allaire, for example, about the consequences of the tough SEC course. “People prefer to put their money in the Bahamas because they’re afraid of what’s going to happen in the US,” BTC-ECHO quoted Circle’s CEO as saying.

Non-US Derivatives Exchange

Such concerns have now been fueled as Coinbase announced on May 2 that it would be expanding overseas. Accordingly, the international derivatives trading platform “Coinbase International Exchange” (CIE) wants to offer institutional investors based outside the USA expanded access to digital assets: “Coinbase International Exchange today introduced BTC and ETH futures contracts with an unlimited term,” it said in the company’s press release.

Today Coinbase launched Coinbase International Exchange @CoinbaseIntExch and will begin by offering BTC & ETH perpetual futures settled in USDC with up to 5x leverage to institutional clients in eligible jurisdictions outside of the UShttps://t.co/OzhbgJlZ2K

– Coinbase 🛡️ (@coinbase) May 2, 2023

Unlike traditional futures, where buyers and sellers are required to complete the trade by a set date and are therefore independent of market conditions, perpetual futures like Coinbase intends to offer have no expiry date. This makes it possible for traders to keep their positions open indefinitely.

According to Cointelegraph, the Coinbase International Exchange will be open to customers in 30 countries around the world – including Singapore, Hong Kong, El Salvador, the Philippines, Thailand and Bermuda, where the CIE is also licensed. Institutional customers can access the platform via an API, whereas private customers will initially not have access. Transactions on the CIE are settled using USD Coin (USDC), Circle’s stablecoin. This is the second largest stablecoin after Tether.

Focus on US market

However, the Coinbase boss countered fears that the largest US crypto trading exchange might be preparing to leave the US: “I will say it clearly, we are 100 percent US-based. I founded this company in the US , because I appreciate the rule of law here, which is very important and I’m very optimistic that the US has the right solution [für den Umgang mit Krypto] will be found,” Brian Armstrong is quoted as saying by Cointelegraph. The Coinbase boss also said on May 5 at the press conference on the Q1 report: “During my visits to Washington, I felt great bipartisan support for new legislation that clearer rules [für Krypo] would do in the US, and I think it’s really important for America that we get this right.”

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