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U.S.-based cryptocurrency exchange Coinbase has no plans to move its operations outside the U.S., CEO Brian Armstrong told investors in its first-quarter earnings report.
On May 5, Armstrong assured shareholders that the firm is “100% committed” to the US market for the long term, despite regulatory uncertainty in the US.
“So let me be clear that we are 100% committed to the US. I founded this company in the United States because I saw that the rule of law prevailed here. It’s really important and I’m actually very optimistic that the US gets it right.”
The “optimism” Armstrong refers to stems from his belief that Congress will soon pass a clear set of rules that crypto firms must follow:
“When I go to DC, it’s bipartisan for Congress to come and pass new legislation that would create a clear set of rules in the US, and I think it’s really important for America to get it right.”
However, Armstrong’s comments were not entirely “optimistic”.
The CEO is concerned about the Securities and Exchange Commission’s unpredictable enforcement action, which comes in light of the fact that the securities regulator issued a Wells Notice to the firm in late March:
“Despite our constant interaction with the commission, they have not made their specific concerns about Coinbase as clear as we would like, and so I must refrain from being too speculative.”
“It is especially difficult to predict the timing of any potential SEC litigation that we may face,” Armstrong added.
The issues have led Coinbase to file a lawsuit in US federal court in an attempt to get the SEC to respond to a petition that has been pending since July.
Today, to provide greater transparency in our long-standing engagement with the SEC, we are sharing our response to the Wells notice we received last month. https://t.co/aquuWmxmRM
— Coinbase ️ (@coinbase) April 27, 2023
The back and forth comes when Coinbase launched the Coinbase International Exchange (CIE) on May 2, prompting many experts to believe that Coinbase was looking for a way out of the US.
The exchange is open to clients in 30 countries around the world, including Singapore, Hong Kong, El Salvador, the Philippines, Thailand and Bermuda, where the CIE license is currently valid.
Today Coinbase launched Coinbase International Exchange @CoinbaseIntExch and will begin by offering BTC & ETH perpetual futures settled in USDC with up to 5x leverage to institutional clients in eligible jurisdictions outside of the UShttps://t.co/OzhbgJlZ2K
— Coinbase ️ (@coinbase) May 2, 2023
Related: SEC has 10 days to respond to Coinbase Complaint: Legal Counsel
Armstrong said the European Union is “ahead” in terms of regulatory progress, with its Cryptocurrency Asset Markets (MiCA) legislation set to come into effect in mid-2024 or early 2025:
“They have passed a comprehensive cryptocurrency legislation called MiCA creating a single clear rule book for the entire region. It’s pretty powerful.”
“I have just returned from a trip from the UK and DC. Both have draft bills in the works that are working on things like stablecoins and market structure. Singapore, Hong Kong, Australia, Brazil are all essentially moving in that direction,” Armstrong added.
The CEO’s remarks come after Coinbase managed to increase its revenue by 22% and cut its net income loss from $475 million to $79 million in the first quarter.
Our Q1’23 financial results are in and our letter to shareholders can be found on the Investor Relations website at https://t.co/8ovHEtPRgf pic.twitter.com/4iWAPGZNMh
— Coinbase ️ (@coinbase) May 4, 2023