Coinbase, the publicly listed largest cryptocurrency exchange in the U.S., opened its offshore derivatives exchange in Bermuda on Tuesday as part of its global expansion drive as it faces legal threats from regulators at home.

See related article: Coinbase says SEC’s legal threats punish transparency, undermine public listing process

Fast facts

  • Coinbase International Exchange allows institutional clients to invest in Bitcoin and Ether via perpetual futures contracts that can offer up to five times leverage, the company said in its announcement. A perpetual futures contract has no expiration date.
  • Coinbase said it is committed to its services and operations in the U.S., but added that it wishes to explore opportunities in jurisdictions outside the U.S. that have interest in becoming cryptocurrency hubs.
  • U.S. regulators have launched legal actions against several crypto exchanges and service providers this year. 
  • In February, the regulator fined U.S. crypto exchange Kraken and shut down its staking program, a move the SEC said was “a win for investors.” In March, it issued a so-called Wells notice to Coinbase and warned it was considering legal action against the firm over its cryptocurrency staking services and other products. Last month, the SEC charged Seattle-based crypto exchange Bittrex for operating an unregistered exchange.
  • Nasdaq-listed Coinbase pushed back and sued the SEC on April 24, demanding that the federal agency be required by a court to respond to the exchange’s petition asking for clearer crypto regulations.
  • Having unclear rules for companies and then filing legal charges against those companies is a “really, really bad” practice, said Changpeng Zhao, chief executive officer of the world’s largest crypto exchange Binance. 
  • His comment came after the U.S. Commodities Futures Trading Commission filed a lawsuit against Binance and Zhao, alleging the company violated derivatives rules by allowing U.S. residents to trade various financial instruments involving digital assets without licensing approval. Binance has denied the charges.

See related article: Coinbase ups the ante with SEC, asking court to require crypto clarity from regulator