Coinbase Debuts International Exchange Following Feud With a U.S. Regulator

The largest U.S.-based cryptocurrency exchange launched the Coinbase International Exchange, which will be open to institutional investors outside the U.S., following tension with the Securities and Exchange Commission over the past few weeks. 

Institutional investors will be able to trade perpetual bitcoin and Ethereum perpetual futures with up to 5x leverage, Coinbase said in a blog post announcing the debut of that exchange on Tuesday. 

“As more and more markets are moving forward with regulatory frameworks to become crypto hubs, we believe the moment is right to launch this international exchange,” Coinbase said.    

Coinbase has been embroiled in a fight with the U.S. Securities and Exchange Commission following news that the exchange was served a Wells notice in March. 

A Wells notice is a letter from SEC staff saying that the agency is ready to recommend formal charges to the five-member commission.

Coinbase said the notice included Coinbase Earn, Coinbase Prime and Coinbase Wallet. 

The exchange responded to that Wells notice on April 19 in a 73-page submission, arguing that the SEC has not “complied with the law” by allowing companies like Coinbase to register with the agency. 

The exchange also separately sued the agency last week to get the SEC to answer yes or no to Coinbase’s rulemaking petition. 

SEC Chair Gary Gensler has repeatedly said firms need to register with the agency and has said many cryptocurrencies are securities, falling under his agency’s jurisdiction. 

“Rest assured that Coinbase is committed to the US, but countries around the world are increasingly moving forward with responsible crypto-forward regulatory frameworks to strategically position themselves as crypto hubs,” Coinbase said on Tuesday in its post. 

“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 said. 

Coinbase’s international move

The international exchange will allow institutional investors to trade “perpetual futures,” which are derivatives contracts with no expiration date and are not allowed in the U.S., according to Investopedia. 

“Building out a global perpetual futures exchange for digital assets will help support an updating of the financial system by making Coinbase’s trusted products and services more accessible to users of digital assets who live outside of the US,” Coinbase said on Tuesday. 

“As more and more markets are moving forward with regulatory frameworks to become crypto hubs, we believe the moment is right to launch this international exchange,” Coinbase said. 

Bitcoin and Ethereum perpetual futures contracts were listed on Tuesday, and are settled in USDC, the exchange said. 

Those products are not available to retail customers, Coinbase said.