Coinbase CEO Considers US Exit Amid Regulatory Uncertainty – Here’s the Latest

Ruholamin Haqshanas
Last updated: | 2 min read
Source: a video screenshot, CNBC / YouTube

Coinbase CEO Brian Armstrong has indicated that the exchange could leave the US if regulators don’t clarify their approach to the digital asset space. 

“Anything is on the table, including relocating or whatever is necessary,” he said during the Innovate Finance Global Summit Tuesday after former UK Chancellor George Osbourne asked whether he could see Coinbase leaving the US, The Telegraph reported

The statement comes as the US has ramped up efforts to bring the crypto industry under its regulatory oversight.

Regulatory agencies in the country, specifically the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), have launched an aggressive crackdown on the crypto industry.

Just recently, the SEC sent a “Wells notice” to Coinbase, threatening the crypto exchange with legal actions regarding some of its listed digital assets, its staking service Coinbase Earn, Coinbase Prime, and Coinbase Wallet. 

Similarly, the CFTC has recently announced that it is suing Binance and founder Changpeng “CZ” Zhao on allegations that the crypto exchange knowingly offered unregistered crypto derivative products in the US in the transgression of the law.

“I think the U.S. has the potential to be an important market for crypto, but right now we are not seeing that regulatory clarity that we need,” Armstrong added:

“I think in a number of years if we don’t see that regulatory clarity emerge in the U.S. we may have to consider investing more elsewhere in the world.”

The recent regulatory pressure has forced at least one crypto exchange to leave the US. 

As reported, Bittrex has announced that it is shutting down US operations due to increasing regulatory pressure and a lack of precise regulatory requirements. Bittrex co-founder Richie Lai said in a statement at the time:

“Regulatory requirements are often unclear and enforced without appropriate discussion or input, resulting in an uneven competitive landscape. Operating in the U.S. is no longer feasible.”

Armstrong Would Have Chosen the UK over the US if he Could Relist Coinbase

Armstrong said that he would have considered the London Stock Exchange over New York if he had been given the option to relist his company.

The crypto boss argued that the UK has a regulatory advantage because there is only one regulator, the Financial Conduct Authority (FCA), which is responsible for both commodities and securities.

On the other hand, there are two separate bodies in the US: the CFTC and the SEC. Armstrong said there is a “turf battle” between these two regulators which have released contradictory statements.

“You don’t have this unfortunate thing happening where the CFTC and the SEC are having a turf battle,” he said. 

“We actually have contradictory statements from the heads of the CFTC and the SEC coming out almost every few weeks. How’s a business going to operate in that environment? We just want a clear rulebook.”

As reported, Coinbase is considering setting up a digital asset exchange outside the United States amid increasing regulatory pressure and a souring banking climate for crypto firms. 

In March, Armstrong warned that a hostile regulatory approach by the SEC could drive the crypto industry outside 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 US should also follow suit if it doesn’t want to lag behind.