Galaxy Digital Eyes Global Regulatory Approval Amid US Crypto Crash
Galaxy Bahamas Ltd. will physically operate from the Bahamas and initially serve as an extension of the company’s trading platform.
Galaxy Digital Holdings Ltd (Toronto: GLXY) has pushed boundaries to help onboard global institutional investors into the cryptocurrency market. The crypto-focused company with over $2 billion in assets under management (AUM) boasts over 880 unique institutional investors. Furthermore, under CEO Mike Novogratz, Galaxy Digital Holdings has several business lines, including crypto trading, asset management, investment banking, and crypto mining, among others.
Galaxy Digital is regulated in several jurisdictions, including 25 states in America and Canada, among others. The company has been pushing its business to gain global regulatory approval to grow its business exponentially. Also, the fall of Terra Luna UST and the FTX crypto exchange, which resulted in a loss of over $70 billion, has drawn the attention of global regulators to the digital asset economy.
Galaxy Digital in the Bahamas
In an effort to ensure future growth sustainability, Galaxy Digital apparently received regulatory approval from the Securities Commission of the Bahamas in December for registration as a digital asset business under the Digital Assets and Registered Exchanges Act of 2020. Reportedly, Galaxy Bahamas Ltd. physically operate from the Bahamas and basically serve as an extension of the company’s trading platform. In addition, Galaxy Bahamas will offer market making and betting services to institutional investors looking to gain crypto exposure
In particular, cryptocurrency betting has already come under regulatory scrutiny in the US after the SEC accused the Kraken cryptocurrency exchange of selling unregistered securities through its betting program. With Binance USD (BUSD) already collected by the United States government, crypto companies in the country are looking for ways to be registered in digital asset friendlier countries.
For example, the United Arab Emirates and El Salvador have received a huge increase in foreign crypto investment due to their welcoming regulations.
“No matter where Galaxy operates, our governance controls and risk management practices always apply,” said Mike Wursthorn, Chief Communications Officer of Galaxy Digital. “Our operations in the Bahamas are no different. We conduct due diligence on clients and counterparties in all jurisdictions and disclose audited financial statements, so clients and shareholders have full transparency about our business.”
However, the crypto operations in the Bahamas can be considered risky after the FTX and Alameda fallout. Furthermore, the case has left hundreds of institutional investors including government agencies with billions of dollars in losses.
“In light of the FTX dispute, clients, counterparties and regulators may view operations within the Bahamian crypto-economy as riskier than operations in other jurisdictions,” the firm said in a February filing.
However, the crypto market is more resilient than before with Bitcoin trading above pre-FTX levels. Nevertheless, fears of a global recession and increased regulatory scrutiny could push crypto prices down before the end of 2023.
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