Coinbase Global revealed on Tuesday that they have attained an official license to operate a cryptocurrency derivatives exchange in Bermuda, a British overseas territory running itself. To begin with, Coinbase International Exchange will enable institutional investors based beyond the US in acceptable locations to make perpetual futures exchanges, as mentioned in their statement.
About Perpetual Futures
Perpetual futures are a specific type of crypto derivative contract that allows investors to speculate on the future value of cryptocurrencies. These investments will have no end dates, they never terminate and can be maintained for as long as preferred. Furthermore, a funding system is employed to make sure that the price of the contract remains synchronized with that of its underlying asset.
In this new central trading platform, customers can trade futures for Bitcoin and Ether. Furthermore, this initiative is being led by a former Group Product Manager, Emmanuel Goh. All the contracts will be backed in USDC (USD Coin) to guarantee safe and reliable settlements.
Conflict between Coinbase and the SEC
In keeping with their goal to expand globally, Coinbase has unveiled the Coinbase International Exchange just as regulators in the US are tightening controls over cryptocurrency and a major banking crisis threatens the economy. The past few months have witnessed a rigorous clampdown by regulatory bodies such as the Securities and Exchange Commission (SEC) on the cryptocurrency industry, coupled with the most severe banking crisis since 2008.
This has adversely affected cryptocurrency exchanges, Coinbase being a notable example, which is currently embroiled in a legal tussle with the SEC. In March, the SEC issued a Wells notice to Coinbase, warning of a potential enforcement action against the exchange for purported violations of securities laws.
In response to the SEC’s accusations, Coinbase CEO Brian Armstrong declared that the company was mandated to take legal action against the SEC. Subsequently, last month Coinbase lodged a lawsuit in order to persuade the SEC into making a move on their months-old petition concerning whether it was feasible for its frameworks to supervise and regulate crypto businesses.