The cryptocurrency industry in the United States is navigating an increasingly complex regulatory landscape, with public crypto exchange Coinbase pushing through challenges to launch a global derivatives platform. On May 2, the exchange unveiled the Coinbase International Exchange (CIE), an institutional platform created for crypto derivatives trading. Bitcoin and Ether perpetual futures will be listed later this week, with all trading on the CIE settled in Coinbase-backed stablecoin USD Coin, eliminating the need for fiat on-ramps.
Although the platform is targeted towards institutional clients, Coinbase emphasized that direct access trading on CIE is limited to eligible, non-U.S. jurisdictions and is not currently available for retail customers. Regulatory support in Bermuda played a key role in the launch of the new platform, as Coinbase obtained a license from the Bermuda Monetary Authority by mid-April 2023. The Class F License allowed Coinbase to operate as both a digital asset exchange and a digital asset derivatives exchange provider, facilitating activities like token sales and issuance.
Bermuda’s regulatory environment is recognized for its transparency, compliance, and cooperation, making it an attractive destination for crypto businesses. The British self-governing overseas territory follows a parliamentary style of government and, like the United Kingdom, is considered generally friendly towards cryptocurrencies.
Recent events have seen Bermuda increase its focus on the crypto industry. Late in April, Miami International Holdings, the operator of the Bermuda Stock Exchange, acquired the remnants of the FTX crypto exchange for $50 million, specifically purchasing its futures and options exchange LedgerX. Premier and Finance Minister Edward Burt reaffirmed that the government remains open to crypto, despite FTX’s failure.
Despite facing a bear market in 2022, Bermuda continues to pursue its crypto hub ambitions, consistent with its recent supportive stance on the industry. Meanwhile, Coinbase’s plans for an international exchange have been underway since March 2022, but its official announcement was clouded by the receipt of a Wells notice from the United States Securities and Exchange Commission (SEC). To push back, Coinbase filed a motion against the SEC on April 25, requesting clarity on industry regulations.
Ultimately, this development could potentially impact the future of cryptocurrency regulations, as the SEC’s ability to provide clear guidelines could either help or hinder the growth of the industry. The outcome of this matter may also influence other jurisdictions like Bermuda, as it seeks to maintain a friendly environment for cryptocurrencies and attract crypto businesses to its shores.