Coinbase, a cryptocurrency exchange, has been under regulatory scrutiny in the United States. The industry had a grim year, with major companies such as FTX and Terra failing, prices plunging, and investors losing billions of dollars in the process. The U.S. Securities and Exchange Commission (SEC) served Coinbase with a Wells Notice earlier this year, which is a letter that the regulator sends to a company or firm at the conclusion of an SEC investigation that states the SEC is planning to bring an enforcement action against them.
Dispute with the SEC
The regulator’s dispute with Coinbase, and a host of other crypto companies, is the allegation that they are selling unregistered securities to investors. However, Coinbase disputes this. Coinbase CEO Brian Armstrong criticized the SEC chief Gary Gensler, saying that he has taken a more anti-crypto view and created lawsuits, which is quite unhelpful for the industry in the U.S. He believes that it is an opportunity for Coinbase to go to court and get clarity that will benefit the crypto industry and the U.S. more broadly.
International Investments for Coinbase
Armstrong also said that Coinbase would not leave the U.S. despite regulatory uncertainty. The company plans to increase its international investments, and it is “very interested” in the United Arab Emirates as a country to do more investment in. Armstrong visited the UAE to learn and meet with relevant regulators in Abu Dhabi and Dubai and to decide if it is a good place for Coinbase to serve a large region of the world. Armstrong also noted that the EU has passed comprehensive crypto legislation, and the UK has been incredibly welcoming. However, the U.S. is a little bit behind right now. Coinbase plans to have a U.S. presence, but if the current regulatory headwinds persist, it would consider options of investing more abroad, including relocating from the U.S. to elsewhere.