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Crypto exchange Coinbase launches overseas crypto derivatives platform
On 2 May 2023, Coinbase launched its overseas crypto derivatives platform. The launch of Coinbase’s exchange came days after its competitor Gemini launched its derivatives exchange.
- Coinbase unveiled its new crypto derivatives platform – Coinbase International Exchange
- The new exchange currently provides international institutional traders with up to 5% leverage
Coinbase, a leading American crypto exchange, announced its entry into the crypto derivatives market. The exchange unveiled Coinabse International Exchange on 2 May for institutional users based outside the United States. In a blog post, the crypto exchange said,
“Perpetual futures accounted for nearly 75% of global crypto trading volume in 2022, creating highly-liquid markets and offering traders additional versatility in their trading strategies. Building out a global perpetual futures exchange for digital assets will help support an updating of the financial system (…)”
Coinbase aims for a pie of the 75% crypto trading volume
Additionally, the international exchange is based in Bermuda. The exchange received a license to operate from the Bermuda Monetary Authority (BMA) on 20 April 2023. The American crypto entity also stated that it is still “committed to the US, but countries around the world are increasingly moving forward with responsible crypto-forward regulatory frameworks”
Notably, Coinbase’s announcement came days after Gemini – its competitor in the American market – also launched a derivatives exchange. The perpetual trading exchange currently lists the top two cryptocurrencies in the market, Bitcoin [BTC], and Ethereum [ETH].
The trading is settled via Circle’s stablecoin – USDC and the leverage initially offered is 5x. This is less compared to Gemini, which is offering a minimum leverage of 20x and a maximum of 100x.
Trouble brewing for the crypto exchange?
Subsequently, Coinbase could be facing new legal hurdles in its home country. A lawsuit filed in California district court claims that the exchange violated Illinois Biometric Information Privacy Act. This is related to the exchange collecting biometric data of users as part of its Know-Your-Customer (KYC) procedure. The complainant is seeking $5000 in damages for intentional violation or $1000 for unintentional violation.
Meanwhile, another lawsuit filed by a shareholder claims that Coinbase’s top executives made over a billion-dollar profit by not disclosing information. The complaint was filed against Coinbase CEO – Brian Armstrong, Surojit Chatterjee, Marc Andreessen Emilie Choi, Frederick Ernest Ehrsam III, and others.
The lawsuit claims that these executives sold over $2.9 billion on the very first day of its listing and from April 14, 2021, to April 22, 2021. Only after the sell-off did the company “proceed to reveal material, negative information that destroyed market optimism from the Company’s first quarterly earnings release forward”. Coinbase, however, has dismissed these allegations.
