As the cryptocurrency industry faces regulatory challenges in the United States, public crypto exchange Coinbase is moving forward with a global derivatives platform.
On May 2, Coinbase announced the launch of the Coinbase International Exchange (CIE), a new institutional platform designed for crypto derivatives trading.
The CIE will start trading by listing Bitcoin (BTC) and Ether (ETH) perpetual futures later this week. All trading on the CIE will be settled in Coinbase-backed stablecoin USD Coin (USDC), requiring no fiat on-ramps.
Coinbase stressed that direct access trading on CIE is available to institutional clients via application programming interface in eligible, non-U.S. jurisdictions. “These products are not available to retail customers at this time,” Coinbase added.
Coinbase didn't respond to Cointelegraph's request to comment on the exact jurisdictions where CIE will be available.
Another major crypto exchange, Gemini, also launched a non-U.S. derivatives platform on May 1. The exchange is open to customers in about 30 jurisdictions worldwide, including Singapore, Hong Kong, Bermuda, El Salvador, Philippines, Thailand and others. "Gemini Foundation is not available to customers in the United States of America, United Kingdom, or the European Union," the firm stated in the announcement.
According to the announcement, the new international crypto platform is launched with support of regulators in Bermuda. As previously reported, Coinbase obtained a license from the Bermuda Monetary Authority (BMA) by mid-April 2023. The Class F License allowed Coinbase to operate a digital asset exchange and a digital asset derivatives exchange provider as well as operate activities like token sales and issuance.
Coinbase noted that Bermuda’s regulatory environment is known for a “high level of transparency, compliance and cooperation.”
Bermuda is a self-governing British overseas territory with a parliamentary government. Similarly to the United Kingdom — where cryptocurrencies are currently legal — Bermuda has been friendly to crypto, growing increasingly bullish on the crypto industry recently.
In late April, Miami International Holdings, the operator of the Bermuda Stock Exchange, purchased remnants of the collapsed FTX crypto exchange. The company bought FTX’s futures and options exchange, and clearinghouse LedgerX for $50 million.
Previously, Bermudan Premier and Finance Minister Edward Burt declared that the government remains open to crypto despite industry failures like FTX. Last year, local authorities also stated that Bermuda would keep its crypto hub ambitions despite the industry facing a massive bear market in 2022.
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The news comes amid major U.S. investment bank Citigroup downgrading Coinbase shares to neutral or high risk from buy or high risk with a $65 price target, down from $80. According to Citigroup analyst Peter Christiansen, regulatory unpredictability in the broader cryptocurrency sector is a looming threat to Coinbase.
Citi’s remarks came amid Coinbase shares already plummeting for several weeks. Over the past month, Coinbase shares plummeted more than 20%, dropping from a high of nearly $72 in April to $50 on Monday, May 1.
As previously reported, Coinbase planned to set up a global crypto exchange as of mid-March 2022. The first reports on Coinbase’s upcoming international crypto platform came just a few days before the exchange officially announced that it received a Wells notice from the United States Securities and Exchange Commission. In response, Coinbase filed a motion against the SEC on April 25, asking the regulator to clarify industry regulations.
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