Some experts believe that the recent actions taken by the SEC against Binance and Coinbase could ultimately result in regulatory clarity for companies operating in the U.S. In the short to medium term, however, these actions may force these firms to focus on other areas.
“Regulatory pressure does create an incentive for exchanges to move overseas; for the digital asset industry specifically, it’s a much easier shift because there are no factories to move,” said Jason Allegrante, Chief Legal and Compliance Officer at Fireblocks.
Coinbase has obtained a license to offer services in Bermuda, where it plans to establish a crypto-trading platform outside the U.S. The exchange is also expanding its operations in Canada, which has tightened its regulations for crypto firms but allowed Coinbase to sign an enhanced Pre-Registration Undertaking, indicating its intent to comply with the upcoming regulatory framework.
“I suspect we will see more and more moves like this,” said Andrew Lawrence, co-founder and CEO of Censo Inc.
Ben Caselin, Vice President & Chief Strategy Officer at centralized crypto exchange MaskEX, agreed that “all eyes are now set on other jurisdictions,” adding that entrepreneurs and small businesses in crypto may be better off in other areas. Despite this, SEC Chief Gary Gensler is not too concerned about crypto firms leaving the U.S. market. Meanwhile, some experts believe that the U.S. market will be difficult to ignore, as it was expected to deliver the next major wave of crypto interest.
Coinbase CEO Brian Armstrong has stated that the exchange remains “100% committed to the U.S.,” and the company has indicated that it will continue to focus on operating in the U.S. Mark Palmer of Berenberg Capital Markets believes that the exchanges, led by Coinbase, will likely take their fight to the courts and hope for more crypto-friendly leaders in charge.