Coinbase Launches Crypto Derivatives Exchange, Except Non-U.S. Users

Prominent crypto exchange firm seeking to serve international users by facilitating crypto derivatives services.
Coinbase’s offerings do not include native users in the

The leading crypto exchange firm in the United States, Coinbase Global Inc., announced the launch of crypto derivatives offerings on Tuesday, May 2. Following the company’s expansion across international territories, the derivatives exchange would be operated from Bermuda. Newly launched services will not be offered to native users in the United States.

Dubbed Coinbase International Exchange, the crypto derivatives offering surfaced despite the tussle between crypto companies and U.S. regulators. Moreover, the company has often raised concerns regarding the need for more regulatory clarity and enforced actions on companies by the U.S. SEC.

Coinbase noted in its blog its new service had received a regulatory license from the Bermuda Monetary Authority (BMA). It will allow non-native users to the U.S. to trade perpetual futures. “Perpetual futures accounted for nearly 75% of global crypto trading volume in 2022, creating highly-liquid markets and offering traders additional versatility in their trading strategies,” it added.

According to the company, through perpetual futures contracts, the new services will allow traders to wager on Bitcoin (BTC) and Ethereum (ETH) prices. This facility will provide the payment settlement in USDC stablecoin and leverage up to five times.

With its product and services, the company noted in its blog that Coinbase is “building out a global perpetual futures exchange for digital assets” to elevate the support for existing financial systems. It highlighted many countries worldwide working to develop regulatory frameworks and anticipating becoming “crypto hubs.” It cited it as the right time for launching the derivative service exchange.

Reuters reported the warning from Coinbase CEO Brian Armstrong, citing the regulatory unclarity and enforced actions on crypto companies from the U.S. regulators to force crypto companies to move out of the country to look for “offshore heavens.” The company and other prominent players in the market consistently asked for clear crypto regulations in the United States.

For several months, many prominent crypto companies struggled with the regulators for different issues. Crypto exchanges were called out for offering crypto staking services. The SEC even went on to fine Kraken to pay 30 million USD, citing the past offerings as violations of unregistered securities.

Coinbase was also among the crypto exchanges providing staking services and raised concerns about strangling the growth of the staking sector. It also clarified the intentions to go to court if similar actions were taken against the company.

In the later days, it took a proactive approach and publicly petitioned the SEC, explaining staking services are not securities. However, the agency sent a Wells notice to the company citing regulatory violations.