Coinbase CEO floats leaving US if regulatory clarity on crypto doesn’t improve
Cryptocurrency broker Coinbase Global may exit the US – where it is one of the few major publicly traded digital asset companies – if regulatory clarity for the sector does not improve, its CEO said.
“The US has the potential to be an important market for crypto, but right now we don’t see the regulatory clarity we need,” Coinbase (ticker: COIN) CEO Brian Armstrong said in comments at a fintech conference in London, CoinDesk reported Tuesday. “I think if we don’t see regulatory clarity emerge in the U.S. for a number of years, we may have to consider investing more elsewhere in the world … Everything is on the table, including relocation or whatever is necessary.”
Coinbase confirmed Armstrong’s comments to Barron’s but declined to comment further. The company is based in the US and was headquartered in San Francisco before becoming an external first company during the Covid-19 pandemic.
Shares in Coinbase rose 1.3% on Tuesday, rising in line with the price of
Bitcoin,
the largest digital resource.
The closest thing to a crypto blue chip, Coinbase has faced increasing headwinds from the regulatory backdrop in the US, where lawmakers and regulators have stepped up their scrutiny of the digital asset industry over the past year. The pressure has intensified since the collapse of crypto exchange FTX last November amid allegations of fraud.
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Coinbase, for its part, disclosed last month that the Securities and Exchange Commission had sent it a so-called Wells notice. This means that agency staff have decided to recommend an enforcement action; Coinbase said it believed this would target its core trading business – as well as an interest-bearing service, an institutional trading solution and its custody business.
At the time, the company said it was confident in the legality of its assets and services and would welcome a legal process if necessary to provide the clarity it has advocated.
Armstrong said it could take years of regulatory uncertainty before Coinbase decides to leave the US
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Such a move probably doesn’t make sense now – the group would likely face regulatory pressure from the US even if it moved overseas. Additionally, dropping the US market altogether would have serious consequences for the business as it currently exists – as one of the most popular crypto trading platforms in the US.
Write to Jack Denton at [email protected]
