According to Brian Armstrong, the CEO of Coinbase, US and UK-based cryptocurrency companies may consider relocating to other countries if the government does not implement proper legislation on the industry. He also hinted that his exchange may consider such a move if the regulatory situation in the US remains the same.
‘Anything is on the Table’
Armstrong believes that the American and British authorities should enforce appropriate crypto rules to prevent local firms from moving to other destinations where there is favorable regulatory clarity. He stated:
“This is the reason why we need clarity about legislation and regulation onshore because if the UK doesn’t have this, if the US doesn’t have this, these firms are going to be built in offshore havens.”
Armstrong emphasized the importance of applicable crypto rules, highlighting the infamous FTX crash in November last year. He praised the UK for starting to work in that direction, saying that it is “moving fast on sensible crypto regulation to both drive economic growth and consumer protection.”
When asked about the possibility of Coinbase relocating to another country, Armstrong said that “anything is on the table, including relocation or whatever is necessary.” Although he thinks the US could be a key market for the crypto industry, the current regulatory uncertainty increases the potential of moving elsewhere in the world:
“I think in a number of years, if we don’t see that regulatory clarity emerge in the US, we may have to consider investing more elsewhere in the world.”
Coinbase’s Issues in America
The US SEC is investigating Coinbase, suspecting that some of the cryptocurrencies listed on the platform are unregistered securities. The Commission issued a Wells Notice against Coinbase in March this year, and the potential enforcement action could be tied to the exchange’s Earn, Prime, and Wallet products. Armstrong remains unfazed by the SEC’s charges, saying:
“While we understand that this is all part of the journey to reforming our financial system, we are right on the law, confident in the facts, and welcome the opportunity for Coinbase (and by extension the broader crypto community) to get before a court.”
Coinbase is not the only US-based crypto firm that has a conflict with the SEC. The commission probed Kraken in February this year over possible violation of rules when offering securities as staking services to American users. The platform terminated such offerings and paid $30 million in disgorgement, prejudgment interest, and civil penalties.