Gemini is the latest cryptocurrency exchange moving operations offshore amid a United States crackdown.
The company — run by twin billionaires Cameron and Tyler Winklevoss — has revealed plans to grow in Asia and set up a crypto derivatives operation outside the U.S., Bloomberg reported Monday (April 24).
With that move, Gemini joins companies like Coinbase in eyeing overseas operations as places like Hong Kong and the Middle East court crypto companies, while the U.S. puts more regulatory pressure on the industry.
“Given the progress of regulators in the Asia-Pacific and the Middle East toward clarifying their regimes, it seems likely that virtual-asset service providers will continue to gravitate toward jurisdictions that provide greater clarity and specific guidance,” Vince Turcotte, director of Hong Kong digital assets at market surveillance firm Eventus, told Bloomberg.
Coinbase CEO Brian Armstrong said last week that crypto firms are going to start building in “offshore havens” if the U.S. and the United Kingdom don’t establish clear regulations. He also suggested his company could be one of them.
“Anything is on the table, including relocating or whatever is necessary,” Armstrong said at an industry conference when asked by former U.K. Chancellor George Osbourne if the CEO could see Coinbase leaving the U.S.
“I think 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,” he said. “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.”
The U.S., meanwhile, has thus far mainly policed the crypto space via enforcement actions by the Securities and Exchange Commission (SEC), a practice many industry actors have criticized as opaque and unhelpful.
“The SEC’s approach to the crypto economy [is] confusing, unclear, opaque and ultimately blind to the harm its regulation by enforcement strategy is doing to lawful companies in this country,” said Blockchain Association CEO Kristin Smith.
Testifying before Congress last week, SEC Chair Gary Gensler said that his agency has, “a clear regulatory framework built up over 90 years … [crypto firms] don’t have a choice. They’re noncompliant, generally, and they need to come into compliance.”
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