Coinbase CEO: About 50% of contract trading volume comes from U.S. users using offshore products via VPN

Coinbase CEO Brian Armstrong tweeted, "For years, cryptocurrency trading has been shifting overseas due to the lack of clear regulatory rules in the U.S., and while perpetual contracts are favored by traders, they are banned in the U.S. Frankly, about half of the perpetual contract trading volume comes from U.S. users who use offshore products via VPNs, and KYC checks are lax. Other companies have set up offshore entities to find ways to evade regulation. After dozens of trips to Washington, D.C., and numerous communications from our policy team, we finally received approval to allow U.S. users to access true global perpetual contracts."

Previously, the CFTC's Market Participants Division issued a clarification letter and a no-action letter to registered futures commission merchant Coinbase Financial Markets (CFM), allowing it to offer cryptocurrency options and perpetual contracts listed on the affiliated offshore exchange Deribit FZE to U.S. users. The letter confirmed that the aforementioned perpetual contracts can be classified as foreign futures under CFTC Regulation 30.1.

Additionally, under specific conditions, the CFTC will not recommend enforcement action regarding CFM transferring digital commodities held by customers and paying stablecoins to its offshore brokerage affiliates for margin purposes, and that affiliate may exercise reuse rights over the aforementioned customer assets.