According to some experts in the industry, the recent actions taken by the SEC against Coinbase, a U.S.-based company, and Binance, based in the Cayman Islands, could have positive implications for companies operating in the United States.
These regulatory measures might provide long-term clarity in terms of regulations. However, these actions could compel these companies to redirect their efforts elsewhere in the short to medium term.
Jason Allegrante, the Chief Legal and Compliance Officer at infrastructure firm Fireblocks, stated that regulatory pressure incentivizes exchanges to relocate overseas. He highlighted that this transition is relatively easier for the digital asset industry since it doesn’t involve physical infrastructure.
Coinbase recently obtained a license to offer its services in Bermuda. It intends to establish a cryptocurrency trading platform outside the United States. Additionally, the company is strengthening its operations in Canada, a country that has implemented stricter regulations for crypto firms. However, Coinbase has shown its commitment to compliance by signing an enhanced Pre-Registration Undertaking.
Andrew Lawrence, co-founder and CEO of Censo Inc., an on-chain custody solution, predicted an increase in such moves away from the U.S. He emphasized that individuals building in the crypto industry focus on the future market size rather than the current market size and they perceive that the future prospects in the United States are unfavorable.
Ben Caselin, Vice President & Chief Strategy Officer at centralized crypto exchange MaskEX, agreed with this sentiment. He pointed out that this is not an ideal period for crypto startups in the U.S.. He suggested that entrepreneurs and small businesses in the crypto space might find better opportunities in other jurisdictions.
Despite the potential departure of crypto firms from the U.S., SEC chief Gary Gensler expressed little concern. He mentioned in an interview that the U.S. doesn’t require additional digital currency since it already has the U.S. dollar.
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Allegrante from Fireblocks added that although the U.S. market may be highly profitable for some exchanges, this alone might not be a sufficient reason for them to exclusively focus their efforts there. He suggested that when a company announces plans to establish exchange operations outside of the United States, it indicates an intention to gradually shift the balance.
Nevertheless, the U.S. market remains significant and cannot be easily disregarded. Edward Moya, a senior analyst at foreign exchange Oanda, stated that the U.S. market was expected to drive the next major wave of crypto interest, making it challenging to completely abandon it.
Despite the SEC’s warning to Coinbase about potential law enforcement actions, CEO Brian Armstrong affirmed the company’s unwavering commitment to the U.S. Coinbase stated that it will continue its efforts to operate within the country despite the lawsuit.