Coinbase launches international exchange as tensions with US regulators grow

Coinbase, the largest cryptocurrency exchange in the United States, Tuesday announced the launch of an international derivatives exchange for institutional crypto traders outside the US to diversity its business amid souring relations with American regulators.

The Coinbase International Exchange will follow the regulatory approval from the Bermuda Monetary Authority (BMA) and new platform will initially offer Bitcoin and Ethereum perpetual futures, Coinbase said in a statement.

The initial international exchange will be only for non-US institutional clients to start, the company said.

The Coinbase International Exchange is another step on our plans to scale globally—going broad and deep, lighting up the map—first announced in May of 2022, Decrypt reported citing Emmanuel Goh Head of Coinbase International Exchange.

The San Francisco bases company is facing legal uncertainties. Earlier in March the company received a notice from the US Securities and Exchange Commission indicating the regulators’ plan to sue the crypto firm over several business lines. 

Perpetual futures are popular among crypto traders, who use them to hedge against losses or speculate on the price of underlying tokens using leverage. 

Unlike traditional futures, where buyers and sellers are obligated to execute the deal on a set date regardless of market conditions, perpetual futures don’t have an expiration period, meaning that traders can hold their positions indefinitely.

Coinbase said trades on the Coinbase International Exchange will be settled in USD Coin (USDC) and the contracts will initially offer up to five times leverage. The new exchange will have several security features, including real-time 24/7 risk management, dynamic margin requirements, and rigorous compliance standards, Coinbase added.

In a blog post, Coinbase said it is committed to the US, but “regulation by enforcement” approach by the US regulators is a “disappointing trend.”  Countries worldwide are increasingly moving forward with responsible, crypto-forward regulatory frameworks as they attempt to position themselves as crypto hubs, Coinbase added.