Coinbase has obtained a license to operate in Bermuda, one of the first countries to establish a comprehensive legal framework for digital assets. According to reports, Coinbase plans to launch an offshore derivatives exchange in Bermuda as soon as next week. The move follows Coinbase’s announcement of plans to expand operations in Abu Dhabi, as part of its “Go Broad & Go Deep” strategy.
John Deaton reacts to Coinbase’s offshore move
John Deaton, a notable figure in the cryptocurrency industry, has suggested that the potential departure of Coinbase from the US may be attributed to the actions of an unelected bureaucratic official. Specifically, he is referring to Gary Gensler, Chair of the Securities and Exchange Commission (SEC), which has taken a strict stance on regulating crypto firms.
Deaton argues that the SEC’s lack of clarity on what constitutes a security, as well as its issuance of Wells Notices to crypto companies for possible securities violations, is un-American. He further notes that other major crypto exchanges, such as Binance, Bittrex, and Kraken, have also faced regulatory scrutiny and that the tight rules are driving crypto firms away from the US market.
The introduction of an offshore exchange in Bermuda would allow Coinbase to offer exotic crypto-related derivatives that are largely unavailable in the US due to regulatory restrictions. This would help the exchange to better compete with Binance, which currently dominates the global crypto trade, and to diversify its revenue base.
Coinbase’s move to establish a presence in Bermuda may suggest that the company is exploring other options as US regulators become increasingly hostile to the crypto industry. CEO Brian Armstrong recently warned that crypto firms may seek to relocate offshore in the absence of clear regulatory guidelines in the country.
Not all are happy with Gary Gensler
Congressman Tom Emmer criticized Gary Gensler, Chair of the Securities and Exchange Commission (SEC), calling him an incompetent “cop on the beat” who is putting Americans in harm’s way and pushing US firms to China. Emmer stated that Gensler has not finalized any rules for crypto companies to comply with, but he still abuses the SEC’s enforcement powers against them.
He also accused Gensler of inappropriately regulating through public statements, often contradicting himself and causing chaos in the marketplace. Emmer believes that Gensler is pushing innovation into the hands of China, the US’s number one adversary. Many Americans are unhappy with Gensler’s approach to regulating the crypto industry and hope that he will be soon fired from his position at SEC.
