Coinbase CEO Floats Leaving U.S. If Regulatory Clarity on Crypto Doesn’t Improve

Text size

Cryptocurrency broker

Coinbase Global

could leave the U.S.—where it is one of the few large publicly traded digital asset businesses—if regulatory clarity for the sector doesn’t improve, its CEO said.

“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,”

Coinbase

(ticker: COIN) CEO Brian Armstrong said in remarks at a fintech conference in London, CoinDesk reported Tuesday. “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 … Anything is on the table, including relocating or whatever is necessary.”

Coinbase confirmed Armstrong’s comments to Barron’s but declined to comment further. The company is based in the U.S. and had headquarters in San Francisco before becoming a remote-first company during the Covid-19 pandemic.

Shares in Coinbase rose 1.3% on Tuesday, gaining in step with the price of 

Bitcoin,
the largest digital asset.

The closest thing to a crypto blue-chip, Coinbase has faced increasing headwinds from the regulatory backdrop in the U.S., where lawmakers and regulators have stepped up their scrutiny of the digital asset industry over the past year. Pressures have intensified since the collapse of crypto exchange FTX last November amid allegations of fraud.

Coinbase, for its part, disclosed last month that the Securities and Exchange Commission had sent it a so-called Wells notice. This means the agency’s staff has decided to recommend an enforcement action; Coinbase said it believed this would target its core trading operations—as well as an interest-bearing service, an institutional trading solution, and its custody business.

At the time, the company said it was confident in the legality of its assets and services, and it would welcome a legal process if needed to provide the clarity it has been advocating for.

Armstrong said it might take take years of regulatory uncertainty for Coinbase to decide to leave the U.S.

Such a move likely doesn’t make sense now—the group would likely face regulatory pressures from the U.S. even if it moved abroad. In addition, ditching the American market altogether would have serious consequences for the business as it exists now—as one of the most popular retail crypto trading platforms in the U.S.

Write to Jack Denton at jack.denton@barrons.com