Coinbase and Gemini launch offshore crypto derivatives exchange
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Coinbase released a global cryptocurrency derivatives exchange days after revealing that it was venturing into an offshore location with a new license obtained from Bermuda. The cryptocurrency exchange based in the US has said that this new platform is open to eligible to institutional traders based outside the US.
Coinbase and Gemini unveil an offshore crypto derivatives exchange
This new platform launched by Coinbase launched perpetual futures contracts for Bitcoin and Ether. Coinbase published a blog post on the matter, saying that this platform provides 5x leverage, and all the trades are settled using the USD Coin stablecoin.
“Building out a global perpetual futures exchange for digital assets will help support an updating of the financial system by making Coinbase’s trusted products and services more accessible to users of digital assets who live outside of the US,” the blog post said.
Coinbase added that more markets were moving forward with the regulatory framework that had become a crypto hub. Therefore, the exchange was uniquely positioned to unveil this global exchange to traders.
Gemini is also venturing towards the non-US market. The exchange launched the Gemini Foundation and opened a BTC perpetual contracts denominated in the Gemini dollar stablecoin. The platform is available to traders from all jurisdictions apart from the ones based in the United States, United Kingdom, and the European Union.
US cracks down on crypto firms
US regulators are also cracking down on digital asset companies operating from the country. Towards the end of last month, Coinbase filed a lawsuit against the US Securities and Exchange Commission (SEC), saying that the regulator failed to guide the cryptocurrency sector.
Coinbase filed the lawsuit against the SEC after the exchange received a Wells notice from the SEC accusing it of violating the US securities law by providing unregistered securities. In April, the securities regulator charged Bittrex and the founder for operating as a national securities exchange, broker, and clearing agency without being registered.
Towards the end of March, the Commodity Futures Trading Commission (CFTC) imposed charges against Binance and the CEO for running an illegal crypto derivatives exchange, among other allegations.
In recent months, the SEC filed charges against the founder of TRON, Justin Sun, and the CEO of Terraform Labs, Do Kwon. The SEC has also sued Gemini, Genesis, and Kraken, accusing them of offering unregistered securities.
The SEC is not backing down on its stance that most cryptocurrencies offered in the US fall under US securities law. Some executives from the crypto industry have also accused regulators of failing to cooperate with them to achieve regulatory clarity.
The Coinbase exchange reiterated that it was still committed to its operations in the US. However, countries worldwide were becoming more interested in having responsible crypto-forward regulatory frameworks to turn them into global crypto hubs. As such, the exchange remains hopeful that the US will join the crypto development and adoption trend and not regulate the industry through enforcement.
