A recent update to the Cyprus Securities and Exchange Commission register showed that US cryptocurrency conglomerate Coinbase has acquired the local license of neobroker BUX.
But what is the firm actually planning to do there?
It’s not totally clear but there are a couple of clues. One is that the firm did not get approved – at least yet – as a Crypto Asset Services Provider (CASP). This means they can’t actually offer ‘physical’ crypto using their Cypriot license.
The company’s only approved URL also links to the company’s institutional offering for perpetual futures trading.
You could thus infer that the entity in Cyprus will be used is to ‘execute’ perpetual futures trades. Firstly because of the link but also because they wouldn’t need CASP approval as perpetuals are derivatives.
As to why they did it in Cyprus, it’s plausible it’s for tax reasons. If trades execute there, so does P&L. Any profits would thus be subject to the comparatively low Cypriot corporate tax rate.
Whether or not that is all the case remains to be seen. However it’s worth noting that the firm has only onboarded a couple of employees in Cyprus and hasn’t listed any other roles that it’s hiring for in the country.
Of the people working there, a couple were with BUX prior to Coinbase acquiring the company’s license.
However, the company has also hired a new CEO – Thomas Papantoniou. Prior to moving to Coinbase, Papantoniou was General Manger of XTB’s CySEC-regulated entity. He was also with IC Markets‘ CySEC entity prior to that.
Drosos Menikou has also joined the firm as Head of Brokerage. Menikou has been in the financial services industry for almost two decades and was most recently Head of Brokerage at XSpot Wealth for close to five years. Prior to that he was on the dealing desk at TFI Markets for just over eight years.