Coinbase (NASDAQ:COIN) claims that it’s on a mission to increase economic freedom for more than 1 billion people.
In support of this mission, Coinbase says that it’s focused on “building the most trusted, compliant products and services and expanding their use around the world.”
Coinbase‘s Go Broad, Go Deep strategy is “building the runway of clear rules, licenses and registrations to make international expansion happen; their Five-point Global Compliance Standard ensures that our products and services are the most trusted on the market.”
Applying the standard and strategy together, Coinbase claims that it “made great strides in the past year – launching new operations in several key markets and rolling out derivatives products.”
As part of their global expansion, Coinbase notes it is in “the process of acquiring a European Union MiFID (Markets in Financial Instruments Directive) licensed entity based in Cyprus that would increase access to their derivatives products by letting us offer them to eligible customers in select countries across the EU.”
The EU’s MiFID is one of “the world’s most highly regarded licensing regimes governing investment services and activities. MiFID has established a comprehensive single rulebook across the EU and is a central pillar in the EU’s Capital Markets Union strategy.”
Adding such a license to their international portfolio “would further support the strong interest we’ve seen in our derivatives offerings and help us capture more of the ~75% of the global crypto market claimed by derivatives.”
All EU member states “implement and are subject to all Single Market laws and regulations, including the same Anti-Money Laundering (AML), Know-Your-Customer (KYC), and sanctions requirements.”
Coinbase strive to “maintain the highest standards for regulatory compliance, and prior to operationalizing any license or serving any customers, they work to ensure their entities meet their Five-point Global Compliance Standard:
- Vetted and Trusted Team: Ensuring the entity is resourced with personnel who meet Coinbase’s cultural tenets. All go-forward employees will be subject to Coinbase background checks, internal policies and procedures, and our culture of compliance. Personnel who do not align with our standards will be offboarded.
- AML and KYC standards: Implementing Coinbase’s Global AML Policy, designed to comply with applicable laws including EU AML standards, and ensuring that all customers meet Coinbase’s strict KYC and due diligence requirements.
- Global sanctions enforcement: Implementing Coinbase’s Global Sanctions Policy to ensure proper compliance with US, European, and other international sanctions regimes.
- Governance best practices: Incorporating this entity into Coinbase’s global governance mechanisms, including: global and local board oversight, routine reporting, including to Coinbase’s Global Audit & Compliance Committee, and the creation of a new Compliance Oversight Working Group specific to this entity.
- Ongoing rigorous monitoring and reporting: Subjecting the entity to Coinbase’s global standards of monitoring, testing and independent audits, including an annual independent AML assessment of this entity.
Coinbase’s Five-point Global Compliance Standard is “designed and overseen by our world-class team of over 400 compliance and legal professionals, drawing on decades of experience from careers with the FBI, DOJ, OFAC, FinCEN, Scotland Yard, major banks, and other key regulators. ”
Coinbase have a long road ahead “before finalizing the acquisition and operationalizing the EU MiFID licensed entity, but this is an exciting step forward in our efforts to expand access to our international derivatives offerings and bring a more global and open financial system to 1 billion people around the world.”
This acquisition is not “expected to have an impact on our financials, is subject to customary closing conditions including regulatory approval, and would be expected to close in 2024.”