Source:
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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.
The
largest
cryptocurrency
exchange
in
the
U.S.
has
contacted
its
institutional
clients
about
plans
to
establish
a
new
crypto
trading
platform
offshores,
Bloomberg reported,
citing
three
people
familiar
with
the
matter.
The
report
added
that
during
talks
with
market
makers
and
investment
firms,
the
crypto
exchange
suggested
setting
up
an
alternative
venue,
away
from
the
main
Coinbase
marketplace,
for
global
clients.
Coinbase
has
not
yet
decided
where
the
new
platform
might
be
based.
Without
confirming
the
plans,
a
Coinbase
spokesperson
said
the
exchange
assesses
geographic
options
and
meets
“with
government
officials
in
high-bar
regulatory
jurisdictions”
as
part
of
its
mission
to
push
for
global
crypto
adoption.
Regulatory
Hostility
in
the
US
Grows
Amid
Banking
Crisis
The
potential
expansion
by
Coinbase
comes
in
the
wake
of
heightened
regulatory
scrutiny
in
the
US.
Specifically,
the
SEC
has
ramped
up
efforts
to
mitigate
the
risks
that
cryptocurrencies
pose
to
the
broader
financial
system
by
cracking
down
on
crypto
companies.
Back
in
February,
the
SEC reached
an
agreement
with
crypto
exchange
Kraken to
stop
offering
staking
services
or
programs
to
clients
in
the
country
and
pay
$30
million
to
settle
allegations
that
failed
“to
register
the
offer
and
sale
of
their
cryptoasset
staking-as-a-service
program,”
which
the
commission
qualified
as
securities.
Furthermore,
the
agency
has threatened
Paxos,
a
US-registered
firm
that
issues
Binance’s
stablecoin
Binance
USD
(BUSD),
with
legal
action
due
to
its
issuance
of
BUSD
tokens.
The
agency
argued
that
BUSD
is
considered
an
unregistered
security.
The
SEC
has
also objected
to
the
proposed
$1
billion
transaction by
Binance.US
to
acquire
the
assets
of
Voyager
Digital,
a
collapsed
cryptocurrency
brokerage.
The
environment
for
crypto
firms
in
the
US
has
further
deteriorated
with
the
shuttering
of
major
crypto-friendly
banks,
including
Silvergate
Bank
and
Signature
Bank.
Armstrong
Criticizes
SEC’s
Approach
Meanwhile,
Coinbase
CEO
Brian
Armstrong
has 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.
“What
I
believe
should
happen
in
the
United
States
is
that
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.
It’s
actually
a
matter
of
national
security
we
get
the
future
of
the
financial
system
built
here
inside
the
United
States.”
Notably,
Coinbase
has
recently announced the
launch
of
its
own
layer
2
blockchain
for
Ethereum
called
Base.
The
L2
describes
itself
as
a
“secure,
low-cost,
developer-friendly”
way
to
build
decentralized
applications
(dApps),
and
will
serve
as
a
home
both
for
Coinbase’s
own
on-chain
products
and
as
an
open
ecosystem
for
developers.