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Coinbase Makes International Moves as US Regulators Stall


blockworks.co 26 May 2023 15:19, UTC
Reading time: ~4 m

Coinbase continues to explore relocation options outside the United States in response to prevailing regulatory uncertainty and restrictions.

Coinbase CEO Brian Armstrong has reiterated that the exchange would maintain a US presence, though it is eager to potentially expand abroad.

So far this year, Coinbase has faced a Wells notice from the SEC – which is essentially a warning about possible enforcement action – which led it to sue the SEC in a bid to demand regulatory clarity.

In April, Armstrong said that “anything is on the table, including relocating,” at a summit. In a later interview with CNBC, he clarified his comments, stating that Coinbase “is not going to relocate overseas.”

But relocations aren’t the only focus for the crypto exchange. Armstrong praised the European Union and the United Kingdom for taking a more “thoughtful” and “comprehensive” approach to crypto, while the US remains “a little bit behind.”

“Coinbase is committed to the US, but countries around the world are increasingly moving forward with responsible crypto-forward regulatory frameworks,” Coinbase said in a statement.

“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.”

Coinbase has since stepped up its expansions and partnerships to show how it is prioritizing its international arms.

Coinbase partners with Bitpanda

The most recent move was announced by Coinbase and Bitpanda on May 25.

Bitpanda is an Austrian crypto exchange and investment platform.

Coinbase said it will use Bitpanda’s investing-as-a-service (IAAS) as part of its offerings for foreign institutional clients.

“By using Bitpanda Technology Solutions, banks can use Bitpanda’s technology to offer their customers trading in as little as three months. The best part? To their customers, it all looks like it’s part of the bank’s own brand,” Bitpanda said in the partnership announcement.

In return, Coinbase will be added to Bitpanda’s liquidity providers.

Coinbase One launched in 35 countries

Coinbase officially launched Coinbase One earlier this month, after beta testing the service.

Outside of the US, it’ll be available in 34 countries including the UK, Germany and Ireland.

Users get access to 24/7 customer support and zero trading charges as well as $1 million in account protections.

An additional 31 counties will get access to the service in the coming months.

Coinbase launches offshore crypto derivatives exchange

Earlier this month, Coinbase opened its offshore crypto derivatives exchange, which targets institutional investors and traders outside of the US.

Initially, the Coinbase International Exchange will list bitcoin (BTC) and ether (ETH) perpetual futures

The new exchange is based in Bermuda, which leads us to another part of its international expansions…

Coinbase eyes further expansion internationally

Coinbase secured a Class F license – which is issued by the Bermuda Monetary Authority – to sell, issue or redeem digital assets in Bermuda.

“Bermuda was one of the first financial centers to pass comprehensive digital assets regulation in 2018, and its regulatory environment is long known for a high level of rigor, transparency, compliance, and cooperation,” the company said in a blog post.

The exchange also announced plans to operate in Abu Dhabi in an effort to diversify its offerings. It’s also eyeing Brazil.

Coinbase also aims to stay in Canada as competitors – such as Binance – exit the market in the wake of new regulations.

“We continue to work with policymakers on a strong crypto regulatory framework for Canadians. We applaud the Canadian securities regulators’ efforts to bring clarity to the industry and look forward to continuing our collaboration with them on regulation that protects consumers while embracing innovation,” the exchange said in a March blog post.

On US soil, Coinbase locked in legal battles

Back on US soil, a court granted Coinbase the ability to arbitrate an IP claim from MouseBelt Labs, which claims that Coinbase and Armstrong stole its work.

The exchange filed a writ of mandamus in response to the SEC refusing to give Coinbase – or the court overseeing the suit between the exchange and the commission – an answer regarding regulatory clarity.

Coinbase argued that the court should “order the SEC to explain its delay to date, state when it will respond, and provide progress reports” to the court.”

Late last night Coinbase replied in the Third Circuit to the SEC’s arguments against our petition for a writ of mandamus. Mandamus is the tailor-made remedy for the extraordinary facts presented here. We continue to appreciate the Court's consideration. https://t.co/OD02kX3524

— paulgrewal.eth (@iampaulgrewal) May 23, 2023

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