Coinbase Launches International Exchange with BTC and ETH Futures for Non-US Institutional Clients as SEC Crackdown Continues

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Tolu Ajiboye
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Crypto exchange Coinbase has launched an international exchange to offer its teeming institutional clients an expanded portfolio of crypto services. According to the company, the new Coinbase International Exchange lists contracts for Bitcoin (BTC) and Ether (ETH) perpetual futures.

In an official announcement, Coinbase said it received a regulatory license from the Bermuda Monetary Authority (BMA). The company said Coinbase International Exchange’s perpetual futures trading is available in eligible jurisdictions outside of the US. However, it did not specify conditions for eligibility or countries where institutional clients can trade.

The official announcement promises that the international exchange offers secure customer protection, high-performance trading technology, and a strong risk management framework to protect clients. Coinbases says customers can enjoy round-the-clock risk management, liquidity from external market makers, and flexible margin requirements. Other features include a liquidation framework that meets compliance standards, and an exchange with enough capital to withstand volatile market events.

Coinbase says the contracts will initially allow up to 5x in leverage, and settle all trading in USDC without any on-ramps. Perpetual contracts, unlike traditional futures, allow traders to hold their positions as long as they would like. These futures have no expiration and therefore do not require traders to execute a deal at a particular time.

Coinbase International Exchange Not Open to US Clients

The new Coinbase International Exchange is not available in the US. According to Coinbase’s announcement, the US’ unfavorable crypto clime is to blame:

“Rest assured that Coinbase is committed to the US, but countries around the world are increasingly moving forward with responsible crypto-forward regulatory frameworks to strategically position themselves as crypto hubs. We would like to see the US take a similar approach instead of regulation by enforcement which has led to a disappointing trend for crypto development in the US.”

The US Securities and Exchange Commission (SEC) has been tough on crypto business amid a wide and continuous crackdown. In March, Coinbase received a Wells notice from the agency, warning of potential charges. The notice said the SEC identified possible violations and may bring official action.

Coinbase, in an official response, said it was “disappointed” at the development, specifying that the notice does not contain enough information for a proper response. The exchange also said that the notice comes after “multiple proposals to the SEC” seeking information and clarity on registration and related matters. Coinbase said the SEC did not respond to any of its proposals.

According to the exchange in the statement, the SEC asked for a possible resolution after an investigation last year. Following the request, Coinbase said it spent millions of dollars creating two different registration models since there was no existing way to register a crypto exchange. The SEC did not respond. Coinbase also asked the SEC to raise questions about any asset on its platform. The SEC also did not specify. Coinbase said it met with the SEC at least 30 times over a 9-month period, to no avail.

Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.