Coinbase Is Mad As Hell and Not Going To Take It Anymore

Coinbase (COIN) went public almost exactly two years ago.

Heralded as a transformational moment for the crypto industry, it seemed as if there were only green pastures ahead for the technology that was Bitcoin (and crypto) and the companies supporting it.

Sure, there would be challenges in the years ahead, but no longer would the industry be attempting some Sisyphean feat.

The industry could finally focus on the technology, as the major regulatory problems seemed to have been solved. Why else would the regulators approve of Coinbase to go public?

If they had issues with, say, the company listing securities they would have brought it up at that point, right?

Of course, we ask this question in jest as obviously the truth is anything but.

We’ve spent a lot of time in recent months discussing the regulatory crackdown in the United States.

And now, because of this crackdown, the crypto industry is (unfortunately) beginning to seek safe haven outside the US’s borders.

This includes Coinbase, in what should be the United States’ crown jewel of crypto – an example of how to do crypto correctly.

Yet, it’s hard to find a US crypto company more at odds with the regulators than Coinbase.

The SEC hates Coinbase because they hate crypto, and Coinbase is the face of crypto in the United States, while Coinbase hates the SEC because they refuse to set clear rules for the industry they go out of their way to persecute.

Turns out that you can only kick somebody around for so long until they start to explore leaving.

That’s why, armed with a regulatory license from Bermuda, Coinbase has launched their new International Exchange.

The Coinbase International Exchange

Coinbase’s International Exchange (IEX) will offer institutional users something that Coinbase has never offered before: Bitcoin and Ethereum perpetual futures.

Perpetual futures are a financial instrument unique to crypto. A future is typically an agreement to buy an asset at a fixed price and amount at a predetermined future date, regardless of market conditions. A perpetual future is different in that the agreement doesn’t have an expiration date, hence the name “perpetual”. This allows traders to gain exposure to crypto with high leverage (in Coinbase’s case, up to 5x) with less risk.

Perpetual futures are a popular tool in crypto, but Coinbase has never offered them because they aren’t allowed in the US. Thus, the International Exchange allows Coinbase to expand both its product suite and geographical reach.

The IEX also allows Coinbase to take market share away from the traditionally dominant perpetual future players – FTX and Binance.

Looking Ahead

As Coinbase notes in their announcement blog post, they remain committed to the US, but:

Translation: If the US regulators don’t get their s**t together, Coinbase is going to continue diversifying itself away from the states.

And that’d be a shame for the country and all of the crypto consumers inside of it.