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Coinbase is considering setting up a digital asset exchange outside the United States amid growing regulatory pressure and an increasingly hostile banking environment for crypto firms.
The largest cryptocurrency exchange in the US has approached its institutional customers about plans to set up a new crypto trading platform offshore, Bloomberg informed ofciting three people familiar with the matter.
The report states that during talks with market makers and investment firms, the crypto exchange suggested setting up an alternative location for global clients away from the main Coinbase marketplace. Coinbase has not yet decided where the new platform could be based.
A Coinbase spokesperson said, without confirming the plans, that the exchange assesses geographic options and meets “with government officials in high-bar regulatory jurisdictions” as part of its mission to drive global crypto adoption.
Regulatory hostility grows in the US amid the banking crisis
The potential expansion by Coinbase comes in the wake of increased regulatory scrutiny in the US. In particular, the SEC has stepped up efforts to reduce the risks that cryptocurrencies present to the broader financial system by cracking down on crypto companies.
Back in February, SEC Signed an agreement with crypto exchange Kraken Stop offering staking services or programs to customers in the country and pay $30 million to settle allegations that it “failed to register the offering and sale of its cryptoasset staking-as-a-service program”, which the commission qualified as securities.
In addition, the agency Paxos threatened, a US-registered firm that issues Binance’s stablecoin Binance USD (BUSD), with legal action due to the issuance of BUSD tokens. The agency argued that BUSD is considered an unregistered security.
SEC has also objected to the proposed $1 billion transaction Binance.US to acquire assets of Voyager Digital, a collapsed cryptocurrency brokerage.
The climate for crypto firms in the US has worsened further with the shuttering of major crypto-friendly banks including Silvergate Bank and Signature Bank.
Armstrong criticizes the SEC’s approach
Meanwhile, Coinbase CEO Brian Armstrong warning The hostile regulatory approach by the SEC could drive the crypto industry out of the United States.
The crypto boss said that almost all major financial centers including Singapore, Hong Kong, London and, more recently, the European Union, have introduced comprehensive crypto legislation, adding that the US should not lag behind. ,
“I believe that should be in the United States we need a clear rulebook so that this industry can be built here. We don’t want it to be like 5G or semiconductors that went offshore. Security matters. Let us get the future of the financial system built here inside the United States of America.”
Notably, Coinbase recently announced The launch of its own Layer 2 blockchain for Ethereum called Base. L2 describes itself as a “secure, low-cost, developer-friendly” way to build decentralized applications (dApps), and is intended as a platform for both Coinbase’s own on-chain products and an open ecosystem for developers. Will serve as a home.