Earlier today, Circle announced that they would be shifting the bulk of their operations out of the United States, which coincided closely with the receipt of their full Digital Assets Business Act license from Bermuda for their Poloniex crypto exchange.
Earlier this month, the crypto industry was surprised to find that many top officials in the US government have been thinking a lot about Bitcoin and crypto, and much to the chagrin of investors in the nascent markets, their views on digital assets are overwhelmingly negative.
It now appears that the lack of “do-no-harm” regulations in the US, and the imminent influx of fresh regulations, is enough to drive many companies away from the United States and towards more crypto-friendly countries.
Although the company is going to continue its operations in the US, Circle co-founders Sean Neville and Jeremy Allaire both noted in a recent blog post that US regulations have stopped Poloniex from offering US-based customers a plethora of capabilities.
“Unfortunately, because of US regulatory limitations, we will not be able to offer many of these new services to US persons for now. However, we’re committed to serving US customers as best we can despite the constraints”, they explained, further adding that they would continue to advocate for changes to US policy.
As for why they chose to locate the new subsidiary in Bermuda, the co-founders said that the island nation’s comprehensive regulatory frameworks are ideal for fostering innovation.
“Bermuda has leapt forward with an exceptionally well designed and comprehensive regulatory framework: the Digital Assets Business Act of 2018 (‘DABA’). DABA provides a comprehensive framework for the regulation and oversight of crypto financial services”, they noted.
More Regulations Are Inbound; Will More Companies Shift Away From the US?
Shortly after President Donald Trump aired his thoughts on cryptocurrencies in a Twitter thread where he explained that he is “not a fan” of Bitcoin, Treasury Secretary Steve Mnuchin held a press conference in which he stated that the lack of regulations surrounding the crypto markets constitutes a “national emergency.”
Furthermore, Mnuchin also said that the government is going to begin policing cryptocurrencies with what he described as “very, very strong” regulations.
It is highly probable that these regulations will stifle innovation and lead many more blockchain and crypto-related companies to flee the US in favor of other countries that are more friendly to the rapidly growing industry.