• Coinbase is exploring the possibility of setting up a cryptocurrency trading platform in a jurisdiction outside US regulatory reach.
• This move could expand Coinbase’s offerings to a global client base and increase its liquidity for institutional clients.
• Establishing a presence overseas could provide the exchange with added benefit of diversifying its risks in case of any regulatory challenges in the US.
Coinbase Exploring Crypto Trading Platform Outside US Regulatory Reach
According to a recent report by Bloomberg, Coinbase has explored the possibility of setting up a cryptocurrency trading platform in a jurisdiction outside United States agencies’ regulatory reach. The report suggests that the crypto exchange has discussed this potential move with institutional clients and market makers.
Regulatory Crackdown on Crypto Services
With increasing regulatory scrutiny and crypto-friendly banks shutting down operations less than a month apart, the climate for crypto platforms in the US has been worsening. In response to this crackdown against the industry, the largest crypto exchange in the US has taken steps to mitigate the impact on its operations.
Solution For Ongoing Regulatory Crisis?
Crypto companies in the US have been facing a challenging regulatory and banking environment, particularly in light of the Securities and Exchange Commission’s (SEC) recent allegations that certain crypto services offered within its jurisdiction constitute securities. Establishing a crypto-trading platform outside of US regulations could offer Coinbase access to new markets, expanding its reach beyond its existing marketplace and providing greater liquidity for institutional investors. Additionally, this move could increase diversification for Coinbase’s risks should any enforcement action be brought against it from SEC or other agencies within U.S jurisdiction.
Possible Locations For Platform
Although establishing an offshore platform could provide Coinbase with greater flexibility, they will still need to consider several factors such as jurisdictional laws surrounding cryptocurrencies prior to making this decision official. Currently jurisdictions such as Malta are seen as favorable locations due their leniencies towards digital assets while avoiding strict financial regulations which may impede growth opportunities for companies operating within their borders such as those imposed by European Union’s 5th Anti Money Laundering Directive (5AMLD).
Conclusion
Coinbase is exploring setting up an offshore cryptocurrency trading platform which would allow them access to new markets while mitigating risk associated with operating under U.S regulations should SEC take enforcement action against it or other related entities operating within their borders such as banks terminating services related to cryptocurrencies . This move could potentially provide increased liquidity for institutional investors while enabling them to tap into previously inaccessible markets outside U.S jurisdiction