Coinbase Pursues Overseas Expansion, Alleges US Regulatory Pressure 

Coinbase, in its recent statement, reveals the passionate pursuit of international expansion as it attempts to fend off regulatory pressure and uncertainty in the US. 

Coinbase Secures License to Operate in Bermuda

The update on Wednesday April 19 by Coinbase reveals that the second-ranked crypto exchange, by transactions completed, secured a license to conduct virtual asset business in Bermuda. The license, issued by the Bermuda Monetary Authority (BMA), is set to facilitate Coinbase to run an offshore derivative exchange scheduled to start on Monday 24.

Coinbase indicates that expanding overseas will enable the US crypto firm to realize additional geographical presence. Besides the Bahamas entry, Coinbase admits initiating inroads into Singapore, Brazil, Abu Dhabi, Dubai, and Canada. The two-month expansion drive dubbed ‘Go Broad, Go Deep’ coincides with when SEC served it with a wells notice. Such indicates that the SEC prefers charges against Coinbase, citing violation of US securities law.

Coinbase Opposed to Regulation by Enforcement

The move by Coinbase to prioritize overseas expansion is unsurprising given its chief executive Brian Armstrong’s stance to criticize regulators’ approach to regulation by enforcement. The executive challenges US regulators to develop rules that all crypto stakeholders should comply with. He decried the absence of clarity in current laws.  

The San Francisco-headquartered crypto exchange lauded the Bermuda Monetary Authority (BMA) in granting it a license to run the derivatives exchange starting April 24. The criticism rendered by Coinbase’s chief is translating into several talks featuring Institutional clients on plans to establish an overseas trading platform. 

The crypto exchange accuses US regulators of excluding input from key industry stakeholders to formulate the regulatory guidelines. Armstrong laments that such players have become the villain of the same rules they are willing to comply with. 

Coinbase Meets UK Authorities, Talks Outcome Considered Encouraging

Coinbase’s response to the mixed signals conveyed by US regulators is opening a series of talks with the Abu Dhabi Global Market (ADGM) authorities. In particular, Coinbase admitted to contacting the Financial Services Regulatory Authority (FRSA) regarding plans to establish a regulated exchange within the free economic zone.

The chief executive’s meetings in London illustrated the quest for the European market. The meetings featured the Economic Secretary Andrew Smith and representatives from the Bank of England (BoE). Besides, Armstrong met with the Financial Conduct Authority (FCA) representative, prompting him to consider the London talk a success and encouraging. 

Armstrong updated in a tweet that Griffith revealed the emerging trend where the UK banks are prohibiting their clients from executing payments to the crypto exchanges. The UK Secretary termed the measure inhibitive, demanding further sensitization and collaboration. He recognized the speed and efforts to deliver stable and sensible crypto regulation. 

Armstrong Challenges Regulators

Since its establishment in July 2012, Coinbase has been willing to prioritize compliance with domestic regulations. By doing so, compliance has propelled Coinbase to rank second in trading volume and preceded only by Binance. 

Recently, Coinbase has turned a critic of regulators. In particular, Armstrong regrets the enforcement actions undertaken by SEC. He considers the enforcement strategy retrogressive and only aids in chasing away crypto innovation to foreign territories. 

The Coinbase head considers SEC’s efforts as oriented towards assembling all crypto businesses under its mandate. Armstrong challenges SEC for lacking transparency on what it considers to constitute security. The criticism echoes the sentiments expressed by the industry executives, particularly for the enforcement action undertaken against Kraken for its stalking-as-a-service product.

 Also, Coinbase is a victim of a similar purge against staking by the agency. The crypto exchange terms SEC as suffering transparency inadequacy on what the regulator considers security. SEC had earlier this year revealed probing Coinbase staking service. 

The stance adopted by Coinbase’s chief executive is attracting allies within the SEC. Commissioner Hester Pierce recently criticized the security watchdog by sharing a heavily worded dissent. The agency official dismissed the basis of SEC considering readjustment of exchange definition to ring-fence crypto exchanges within its jurisdiction. 

Editorial credit: 24K-Production /

Leave a Reply

Your email address will not be published. Required fields are marked *