Brian Armstrong, the CEO of Coinbase, has voiced fear that, in the absence of regulatory clarification, his business would be compelled to leave the US. Armstrong responded to a question from former UK Chancellor George Osbourne at the Innovate Finance Global Summit on Tuesday about the possibility of Coinbase leaving the US. According to The Telegraph, Armstrong said, “Anything is on the table, including relocating or whatever is necessary.”
In reaction to the US’s escalating governmental control of the bitcoin business, Armstrong made his remarks. The Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) have lately started to take serious action against the sector, including opening investigations into Coinbase and Binance’s business practices. The SEC threatened Coinbase in a “Wells notice” with legal action over several of the digital assets it lists, as well as its staking service Coinbase Earn, Coinbase Prime, and Coinbase Wallet. Similar to this, the CFTC recently revealed that it was suing Binance and its founder Changpeng “CZ” Zhao on claims that the cryptocurrency exchange knowingly provided illegal crypto derivative products in the US.
Armstrong claimed that the US’s attitude to regulating the bitcoin business is unclear and that Coinbase could have to think about moving to a more benevolent country. Although there is currently a lack of legislative certainty, the U.S. has the potential to be a significant market for cryptocurrencies, he added. “I believe that if we don’t see that regulatory clarity emerge in the US in a number of years, we may need to think about investing more elsewhere in the world.”
Armstrong also cited the UK regulatory structure as an advantage over the US since it has only one regulator, the Financial Conduct Authority (FCA), who is in charge of both commodities and securities. Contrarily, the CFTC and the SEC, two independent regulatory authorities in the US, have issued contradicting comments, confusing and unsettling firms. According to Armstrong, there is a “turf battle” going on between these two authorities, and Coinbase needs a set of clear operating guidelines.
In light of Bittrex’s announcement that it is discontinuing its US operations owing to mounting regulatory pressure and a lack of specific legal criteria, Coinbase has expressed its worries. In light of increasing regulatory pressure and a challenging financing environment for cryptocurrency startups, Coinbase is allegedly also thinking about establishing a digital asset exchange outside of the United States. Armstrong forewarned in March that the SEC’s harsh regulatory stance would force the crypto business outside of the country. The European Union, Singapore, Hong Kong, London, and, most recently, the European Union, he said, practically all major financial centers, should the US follow suit if it doesn’t want to fall behind.
