Thursday, 1 June 2023
CryptoCrypto Exchange

Bermuda Issues a License to the Coinbase

The American cryptocurrency exchange Coinbase has been granted permission to conduct business in Bermuda and is expected to open a derivatives exchange there as early as next week.

In a blog post published on April 19, Coinbase claimed that it had “received our regulatory license to operate from the Bermuda Monetary Authority” – the country’s financial watchdog.

The Financial Hub of Coinbase

With the help of the license, known as a Class F Licence under the Digital Asset Business Act, Coinbase can carry out several operations, including token sales and issuance. It also enables it to function as a provider of digital asset derivatives exchanges as well as an exchange for digital assets.

According to a Forbes article dated April 19 that cited “a person close to the company,” Coinbase intends to open a derivatives market in Bermuda as early as next week.

  • Coinbase has been granted permission to conduct business in Bermuda.
  • Coinbase intends to open a derivatives market in Bermuda as early as next week.
  • Employers in Bermuda are forced to pay payroll taxes

In addition, Coinbase noted that Bermuda’s regulatory framework has “a reputation for rigor, transparency, compliance, and cooperation,” making it one of the company’s financial hubs.

Because it happened so soon after CEO Brian Armstrong said at a fintech conference in London that the exchange might think about leaving the United States due to a lack of regulatory clarity, some in the cryptocurrency community believe the most recent development could mark the start of Coinbase‘s demise in the country.

In November of last year, Armstrong said that the Securities and Exchange Commission had failed to offer regulatory certainty and was pushing investors and trading activity abroad. Armstrong has been outspoken about his views on the state of cryptocurrency legislation in the United States.

The tax laws of a Bermuda-based exchange are another obvious advantage. Employers in Bermuda are forced to pay payroll taxes, but because the country has a corporate tax rate of 0%, profits are tax-free, making it a desirable base for businesses trying to reduce costs.

The most recent change is a revision to Coinbase’s “go broad and go deep” campaign, which now includes a goal to “establish regulated entities and local operations” to support global expansion.

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