The major US crypto trading platform, Coinbase Global, is launching an international derivatives exchange for institutional cryptocurrency traders, seeking to diversify its activities amid strained relations with US regulators.
The new platform, Coinbase International Exchange, will begin trading perpetual futures for bitcoin and ether from this week, having received a licence from Bermuda authorities last month.
With the move, Coinbase enters a market dominated by companies based outside the US, such as Binance which is the largest crypto exchange and FTX before it collapsed.
Uncertainty about its US operations is intensifying
Coinbase, which has its roots in San Francisco, is facing increasing legal uncertainty after being notified by the US Securities and Exchange Commission (SEC) in March that it plans to file a lawsuit against it for several of its activities.
“Coinbase continues to await approval to be able to offer futures directly to our US customers… The initial international exchange will be based in Bermuda and only for non-US institutional investors initially,” a company spokesperson told Bloomberg.
Popular perpetual futures
Perpetual futures are popular among crypto traders, who use them to hedge against losses or to speculate on the price of the underlying cryptocurrencies by leveraging. Unlike contracts in traditional finance, they have no expiration date, allowing investors to hold them for as long as they want.
On the Coinbase International Exchange, contracts will initially offer leverage up to five times and all trades will be settled in USD Coin, the stablecoin issued by Circle Internet Financial, which has a partnership with Coinbase.
In a blog post, Coinbase said it is still “committed to the US” but described the regulatory trend in the country as a disappointing trend.
Coinbase had 84% of its revenue last year from the US, where it is most recognizable.
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