Crypto exchange Coinbase Global Inc. may consider moving its headquarters outside the US unless the country changes its approach to regulation, Chief Executive Officer Brian Armstrong said.
“Anything is on the table,” Armstrong said when asked by former UK Chancellor of the Exchequer George Osborne at a fintech conference in London on Tuesday whether San Francisco-based Coinbase would consider moving to Britain. “Including, you know, relocating or whatever is necessary.”
While Armstrong has been vocal about lack of clarity in current US crypto regulation, raising the possibility of relocating marks an escalation of the rhetoric. In late March, Coinbase was notified by the US Securities and Exchange Commission that the regulator plans to bring an enforcement action against the exchange.
Lawmakers in the US have yet to agree on a series of bills that could establish bespoke regulation for the crypto sector. At the same time, the SEC and the Commodity Futures Trading Commission are locked in a dispute over which regulator is best suited to overseeing the nascent sector, based on whether cryptoassets like Bitcoin and Ether should be considered securities or commodities.
“The US has the potential to be an important market in crypto, but right now, we are not seeing that regulatory clarity needed,” Armstrong said, adding that the UK is Coinbase’s second largest market globally by revenue. “I think if a number of years go by where we don’t see regulatory clarity emerge in the US, we may have to consider investing more in other regions of the world.”
Coinbase, which has around 100 million verified users, is in talks with market makers and investment firms on the possibility of establishing an alternative venue for global clients, Bloomberg News reported in March. It has around 300 employees at its UK office and received authorization as an e-money provider from the Financial Conduct Authority in 2018.
The company is talking “very, very actively” to policymakers and governments across Europe about where it may base its regional hub, according to Nana Murugesan, vice president of international and business development.
“It’s something that hopefully in the in the near term, like in the coming months, that we need to finalize, but there are lots of good options,” Murugesan said in an interview on Monday. The exchange already has a significant presence in Germany and Ireland, in addition to registrations with regulators in the Netherlands and Italy.
Coinbase also plans to seek similar approvals in Spain and France. Crypto companies like Circle Internet Financial Ltd. and Binance Holdings Ltd. have expanded in France in the past year, drawn by President Emmanuel Macron’s efforts to turn the country into a hub for the sector.
The European Union is poised to approve its Markets in Crypto Assets directive (MiCA) on Thursday, the most comprehensive crypto-specific legislation among developed global economies. Set to be implemented some time in 2024, the new rules will allow crypto companies with registration in a single EU member state to passport those approvals across the entire bloc.
By Emily Nicolle / Bloomberg