Crypto Companies Eye European Expansion While Some Plan to Make an Exit

The cryptocurrency industry is transforming significantly due to heightened government regulations, particularly in the United States. Many US-based crypto companies, especially exchanges, are considering strategies to shift their operations abroad, which includes exploring new markets and contemplating relocating entirely out of the country.

In contrast, Europe has become an attractive destination for crypto firms seeking a more favorable regulatory environment. Several companies like eToro, Galaxy Digital, and Ark Invest have announced plans to expand their operations into Europe.

eToro Receives Expansion Approval into EU

eToro, a multi-asset investment platform, has recently received approval for its registration under the CySEC CASP (Crypto Asset Service Provider) Register. This milestone enables eToro to provide regulated cryptocurrency services across all European Union (EU) member states through a single entity, eToro (Europe) Digital Assets Ltd.

The regulatory framework facilitating this expansion is anticipated to be in effect by December 2024, coinciding with the EU’s Markets in Crypto-Assets Regulation (MiCA) implementation.

Before commencing operations under this new regulatory framework, eToro will obtain the necessary authorization from the competent authority, CySEC. Dr. Hedva Ber, Deputy CEO at eToro, said this registration signals that they are 100% ready to embrace a new era for crypto once MiCA comes into effect next year.

Ber further emphasized that as a global company regulated in various markets worldwide, they are very much looking forward to the increased certainty and security that MiCA will offer consumers and reputable businesses in this space. Ber also highlighted the significance of Europe to eToro, as most of their users are based there, and they want to continue offering local investors direct access to a wide range of crypto assets as part of a diversified portfolio.

Galaxy Digital Appoints New CEO for Europe Expansion

Galaxy Digital, the American investment firm, is set to strengthen its presence in Europe by appointing a new regional CEO. Leon Marshall, formerly the Managing Director and Global Head of Sales at Genesis, has been chosen to spearhead Galaxy Digital’s European operations. This move is in response to the evolving cryptocurrency landscape in Europe, particularly in light of the forthcoming Markets in Crypto-Assets (MiCA) regulations.

Marshall will oversee the company’s expansion in the region and be responsible for managing operations and crucial client relationships. This appointment comes on the heels of Galaxy Digital’s strategic partnership with DWS, a prominent European asset management company aimed at developing a comprehensive range of European digital asset exchange trading (ETP) products.

Tether Partners with European Mining Company

Stablecoin giant Tether also recently revealed a strategic investment in Northern Data Group, a German-listed Bitcoin mining company, which Tether claims is poised to become the biggest independent AI Player in Europe. This move marks the firm’s latest endeavor to diversify beyond fintech and is part of a broader trend in the crypto industry toward exploring artificial intelligence.

According to Tether’s statement, Northern Data’s focus on robust data storage and high-performance computing aligns with its own forward-looking objectives. The collaboration between the two companies will leverage various technologies, including artificial intelligence and peer-to-peer communication.

Paolo Ardoino, Tether’s Chief Technology Officer, expressed enthusiasm about the investment, emphasizing its significance in venturing into new technological frontiers. He stated that this funding underscores their commitment to responsible growth and innovation while preserving the strength and integrity of Tether tokens’ reserves.

Ark Invest Acquires Europe-based EFT Issuer

Cathie Wood’s Ark Invest is making strides to enter the European market. Ark Invest has acquired Rize ETF Limited, a Europe-based exchange-traded fund (ETF) issuer, to facilitate this move. This acquisition will enable Ark to introduce its ETF offerings to investors in Europe, the U.K., and beyond, operating under the Undertakings for the Collective Investment in Transferable Securities framework. Additionally, the deal will support the growth and diversification of Rize ETF’s thematic products.

According to regulatory filings, Ark Invest will acquire a 70% stake in the Rize ETF from the U.K.-based asset and wealth management acquisition firm AssetCo for up to £5.25 million ($7 million). As part of the agreement, Ark and AssetCo will collaborate on the launch of new ETF products for AssetCo’s active equity asset management unit, River and Mercantile. AssetCo had previously agreed to acquire a majority stake in Rize ETF in July 2021.

Ark Invest aims to introduce several of its actively managed strategies in Europe by the end of the year, as outlined in FAQs published on its website. According to the FAQs, the timing of this acquisition is driven by a recognition of shared strengths, a passion for innovation, shifts in the investment landscape, and a growing interest in active ETFs within Europe.

Cathie Wood, founder, CIO, and CEO of Ark Invest, emphasized the significance of this acquisition, stating that it advances Ark Invest’s commitment to offering high-quality thematic investment solutions to a global investor audience, particularly European investors who have not been able to access their products.

Wood further highlighted the robust growth potential in the European ETF market, driven by the increasing accessibility of such products through digital platforms and the rising demand for innovative investment exposures provided by active ETFs.

Bybit Plans to Exit Europe

Bybit, a cryptocurrency exchange, has decided to suspend operations in the U.K. next month in response to recent regulatory changes. That comes just a week after the company stated that it was exploring all options to continue its presence in the country.

Starting from October 1, new customers will no longer be able to open accounts, and as of October 8, existing customers will be restricted from adding funds, creating new contracts, or increasing their positions. However, they will still be able to reduce and close their positions and withdraw their funds from the platform.

The October 8 date holds significance because it aligns with the firm’s deadline to comply with U.K. regulations regarding advertising and promotions. These regulations stipulate that crypto businesses must be registered with the Financial Conduct Authority (FCA) to approve ads and communications. Notably, Bybit is not currently listed on the FCA’s crypto register.

The company stated that in light of the U.K. Financial Conduct Authority’s introduction of new rules regarding marketing and communications by crypto businesses as outlined in the June 2023 Policy Statement (PS23/6) entitled ‘Financial Promotion Rules for Crypto assets,’ it has chosen to embrace the regulation proactively and pause services in this market.