Brian Armstrong, the CEO of Coinbase, the largest cryptocurrency exchange in the United States, has recently called for clearer regulations on cryptocurrency in both the US and the United Kingdom. Armstrong argues that without such laws, firms may be forced to develop in “offshore havens,” where they may be subject to less oversight and regulation.
According to a Reuters report, Armstrong made the comments during a conference held by the Innovate Finance industry body, citing the failure of the Bahamas-based FTX exchange last year as evidence of the need for clearer regulations.
Will Coinbase Leave U.S. Soil?
The crypto industry has seen significant growth in recent years, with more and more investors entering the market. However, the need for clear regulations has made it difficult for regulators to keep up with the rapidly evolving industry. As a result, many firms have chosen to operate in offshore locations where regulations are less strict.
For this, Coinbase CEO Brian Armstrong has called for greater regulatory clarity onshore, warning that firms will be forced to seek refuge in offshore havens without it.
Coinbase CEO has praised the UK for its sensible approach to regulating cryptocurrency in a recent tweet. Armstrong expressed his excitement about continuing to invest in the UK but noted concerns about banks taking a hardline approach to customers transferring cash to crypto exchanges to “prevent fraud.”
While Armstrong stated the above, the UK has been making strides toward regulating the cryptocurrency industry. In early 2021, the UK’s financial watchdog, the Financial Conduct Authority (FCA), introduced a new registration process for cryptocurrency firms, requiring them to comply with anti-money laundering and counter-terrorism financing regulations. Armstrong said at the conference:
Anything is on the table, including relocating or whatever is necessary. I think the U.S. has the potential to be an important market for crypto, but right now we are not seeing the regulatory clarity that we need.
Major U.S Crypto Exchange Faces SEC Scrutiny
Bittrex, once the largest platform for trading digital assets in the US, has decided to leave the country for good due to regulatory issues. The Securities and Exchange Commission (SEC) had threatened to sue the company in March over alleged violations of investor-protection laws, as reported yesterday by Bitcoinist.
The SEC’s enforcement staff had reportedly informed Bittrex that it would recommend the agency sue the company over alleged violations of securities laws related to its handling of certain digital assets. Bittrex had been working with the SEC to resolve these issues but ultimately decided that leaving the US market was the best action.
Following this event, Bittrex has accused SEC Chairman Gary Gensler of attempting to drive cryptocurrency out of the United States and has warned that the impact of the Commission’s approach will have a “chilling” effect on the broader blockchain technology and innovation ecosystem.
In its statement, Bittrex claimed that the SEC’s actions would directly harm U.S. customers and crypto industry employees and put the country at a significant disadvantage in developing blockchain technology.
As the crypto sector continues to grow and evolve, it is becoming increasingly clear that effective regulation is necessary to protect investors like firms such as Coinbase and Bittrex have been demanding in the past. Therefore, regulators and lawmakers must work together to create clear and comprehensive regulatory frameworks that encourage innovation while safeguarding against abuse.
Featured image from Unsplash, chart from TradingView.com