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Crypto companies openly conflict with the SEC
Growing regulatory pressure from the Securities and Exchange Commission (SEC) is leading some crypto companies to consider leaving the United States. Both Coinbase and Ripple have criticized the SEC and expressed their intention to move their operations abroad. However, the crypto industry is a significant market in the U.S., with more than 50 million Americans holding cryptocurrencies. This raises the question of whether crypto firms will follow through on their threats to leave or not.
The SEC has taken a strict stance against crypto companies such as Kraken, Paxos, Ripple, and Coinbase, accusing them of violating securities laws. The regulator argues that most tokens in the market could be classified as securities, and therefore must comply with more stringent registration and disclosure requirements. Crypto firms have contested this characterization, but their threats to leave the U.S. have been met with skepticism from experts. They believe that crypto companies are unlikely to leave a market as large as the U.S.
Although Ripple’s CEO, Brad Garlinghouse, has threatened to relocate the company overseas since 2020, it has not yet occurred. Meanwhile, at a fintech conference in London last April, Coinbase’s CEO, Brian Armstrong, suggested that the exchange might invest more abroad or consider relocation if it doesn’t receive regulatory clarity in the U.S. However, a month later, Armstrong announced that Coinbase would not relocate overseas. These comments suggest that while some crypto companies may be unhappy with U.S. regulations, it remains to be seen whether they will act on their threats to leave.