With attempts to reform US crypto regulation currently held up in Congress, Coinbase is the latest American firm to turn its attention off-shore.
However, even if lawmakers fail to address the situation, US courts may provide the clarity businesses demand.
Among US-based crypto firms, criticism of the country’s regulatory environment has reached a fever pitch.
For example, on Wednesday, September 6, the executive chairman and co-founder of Ripple Labs, Chris Larsen, accused President Biden’s crypto policy of hurting American business interests.
“We owned it and we don’t anymore because the Biden administration, for whatever reason, decided they wanted to push this industry offshore,” he said, adding that “it’s London, Singapore, Dubai that are the global capitals of blockchain now.”
The same day Larsen asserted that US crypto policy is driving businesses elsewhere, an announcement by Coinbase somewhat validated his claim.
Having initially announced its “Go Broad, Go Deep” strategy for international growth last year, on Wednesday, the San Francisco-based firm said it would move ahead with phase two of its global expansion plans.
Pointing out that Europe now claims two-thirds of the world’s blockchain jobs, Coinbase is increasingly prioritizing the EU and UK markets.
EU adopted the Markets in Crypto-Assets (MiCA) regulation earlier this year. Once it comes into force in 2024, MiCA will allow crypto asset service providers (CASP) to passport licenses gained in one member state across the block.
In its recent update, Coinbase announced it’s in the final stages of choosing a country to serve as its licensing hub under MiCA.
The company has already registered as a CASP and e-money institution in Ireland and holds additional crypto licenses in Germany, the Netherlands, and Italy.
Meanwhile, Coinbase applauded the UK for sending a “powerful signal that it is open for business to crypto asset firms” in the form of the Financial Services and Markets Act (FSMA).
With European crypto regulation in the ascendency, the firm cautioned that the US risks “forfeiting its influence over the future of the financial system.”
While the SEC remains hell-bent on continuing its war on crypto, judges have ruled against the regulator in several key trials.
A recent court ruling has potentially marked a pivotal moment in the legal classification of cryptocurrencies in the US. The ruling favored Ripple Labs, which has been embroiled in a legal battle with the SEC since 2020.
At the heart of the case is the SEC’s designation of XRP as a security. In a victory for Ripple, after 3 years, Judge Analisa Torres decided that the token doesn’t qualify as a security.
In comments reported by Coin Telegraph on Thursday, Ripple CTO David Schwartz said the’ ruling demonstrated that “the tide is turning” for the US crypto sector.
Going forward, Schwartz said he thinks US judges are growing more skeptical of the SEC’s lawsuits against crypto businesses. “They’re starting to get huge pushback from Coinbase and pushback on the ETFs,” he observed.
Larsen, who also views favorably a recent judgment that instructed the SEC to reevaluate Grayscale’s application for a spot Bitcoin Exchange-Traded Fund (ETF), shares his observation.
“This is the beginning now, through the courts, unfortunately, instead of the regulators, to get that clarity and get us back in the game,” the Ripple chairman argued.