Coinbase has reassured its investors that it has no plans to move its operations elsewhere, despite the regulatory uncertainty and looming crackdown on the cryptocurrency market in the United States.
In the company’s first shareholder letter in 2023, CEO Brian Armstrong emphasized the importance of adhering to the rule of law in the country and assured investors that Coinbase is committed to the U.S. market.
Coinbase’s commitment to the U.S. market was questioned following its introduction of the Coinbase International Exchange (CIE) on May 2, 2023. Some experts suggested that the move may be an attempt to distance itself from the United States.
However, Armstrong dismissed these claims, stating that the exchange is accessible to customers from 30 different countries, including Singapore, Hong Kong, El Salvador, the Philippines, Thailand, and Bermuda, where CIE is currently licensed.
Today Coinbase launched Coinbase International Exchange @CoinbaseIntExch and will begin by offering BTC & ETH perpetual futures settled in USDC with up to 5x leverage to institutional clients in eligible jurisdictions outside of the U.S.https://t.co/OzhbgJlZ2K
— Coinbase 🛡️ (@coinbase) May 2, 2023
Armstrong is optimistic that U.S. Congress will soon introduce clear regulations that crypto businesses must follow. He noted that Congress has bipartisan support for such action He stressed that it is critical for America to get this right. According to Armstrong, the European Union is leading the way in terms of regulatory progress with its Markets in Crypto Assets (MiCA) legislation, which is set to come into effect in mid-2024 or early 2025. The E.U.’s MiCA establishes a single, transparent set of rules for the entire region, making it a comprehensive crypto law that is quite potent.
Though Armstrong is optimistic that the U.S. market will continue to be a key player in the global cryptocurrency market, it remains to be seen how regulators will approach cryptocurrency regulation and how this will impact Coinbase and other players in the market.
Meanwhile, in March 2023, the U.S. Securities Exchange Commission (SEC) issued a Wells Notice to Coinbase informing the company of a pending regulatory and enforcement action. Coinbase responded by stating that the regulator’s proposed action is based on “unsupported and untested legal theories” and would pose “major programmable risks” to the commission and unintended consequences for the crypto market. The exchange also filed a court action seeking to compel the SEC to respond to its petition that has remained unresolved since July 2022.
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