Social Navigation

Coinbase Crypto Exchange Considers Offshore Trading Platform Amid US Crypto Crackdown – Here’s What You Need To Know


Coinbase Crypto Exchange Considers Offshore Trading Platform Amid US Crypto Crackdown – Here’s What You Need To Know

Source: Adobe Stock / photo_gonzo

Coinbase plans to create a digital asset exchange outside the United States amid growing regulatory pressure and a degraded banking climate for crypto businesses.

The largest cryptocurrency exchange in the United States has reached out to institutional clients about plans to establish a new overseas crypto trading platform, Bloomberg reported, citing three people familiar with the matter.

The report added that in discussions with market makers and investment firms, the crypto exchange suggested creating an alternative venue, away from the main Coinbase market, for global customers. Coinbase has yet to decide where the new platform might be based.

Without confirming the plans, a Coinbase spokesperson said the exchange was evaluating geographic options and meeting with “government officials in high-level regulatory jurisdictions” as part of its mission to push for global adoption of the coinbase. cryptography.

U.S. regulatory hostility rises amid banking crisis

Coinbase’s potential expansion follows increased regulatory scrutiny in the United States. Specifically, the SEC has stepped up its efforts to mitigate the risks that cryptocurrencies pose to the broader financial system by cracking down on crypto companies.

In February, the SEC reached an agreement with crypto exchange Kraken to stop offering staking services or programs to clients nationwide and pay $30 million to settle allegations that failed to “register the ‘offering and selling of their crypto-asset-as-a-service program staking’, which the commission characterized as securities.

Additionally, the agency threatened Paxos, a US-registered company that issues the Binance USD (BUSD) stablecoin, with legal action over its issuance of BUSD tokens. The agency argued that BUSD is considered an unregistered security.

The SEC also opposed Binance.US’ proposed $1 billion transaction to acquire the assets of Voyager Digital, a bankrupt cryptocurrency brokerage.

The environment for crypto businesses in the United States has deteriorated further with the closure of major crypto-friendly banks, including Silvergate Bank and Signature Bank.

Armstrong criticizes the SEC’s approach

Meanwhile, Coinbase CEO Brian Armstrong warned that a hostile regulatory approach from the SEC could drive the crypto industry out of the United States.

The crypto boss said that almost all major financial hubs including Singapore, Hong Kong, London and most recently the European Union have introduced comprehensive crypto legislation, adding that the United States should also follow suit if they don’t want to be left behind. .

“What I think should happen in the United States is that we need clear regulations so that this industry can be built here. We don’t want it to be like 5G or semi- drivers who have gone overseas. It’s actually a matter of national security that we get the future of the financial system built here in the United States.”

Notably, Coinbase recently announced the launch of its own layer 2 blockchain for Ethereum called Base. The L2 describes itself as a “secure, inexpensive, and developer-friendly” way to build decentralized applications (dApps), and will serve as a home for both Coinbase’s own on-chain products and as an open ecosystem for developers. .

Joanna Swanson

Joanna Swanson is Europe correspondent at the Thomson Reuters Foundation based in Brussels covering politics, culture, business, climate change, society, economies and inclusive tech. With specific focus in breaking news, she has covered some of the world's most significant stories.