Coinbase, Gemini Can’t Resist Overseas Derivatives

Crypto exchanges based in the U.S. are wading further into overseas markets. Late last week, Winklevoss-founded exchange Gemini said it will soon launch a crypto derivatives trading platform outside the U.S. called Gemini Foundation, confirming our scoop from last month. The first product it will sell—a perpetual futures contract—is a crypto fan favorite, and will let traders take on leverage of up to 100 times.

Gemini isn’t alone. Coinbase, too, has been looking into an overseas exchange that would let people trade derivatives with extraordinary leverage, according to March reports from The Block and Bloomberg. The company says it’s going “broad and deep” with an international expansion blitz, which has included launching products in Singapore and Brazil, locking down a license in Bermuda and having discussions with regulators in the United Arab Emirates. (Coinbase already dabbles with a couple of more tame derivatives in the U.S. like nano bitcoin futures, but they're not a major part of its business.)

So it’s worth asking the question: Why now? It's easy to interpret all this as crypto companies leaving the U.S. in a huff as regulatory crackdowns mount, but presumably it's a lot more complicated: