Leading US Crypto Exchange Heads to Bermuda Amidst Regulatory Uncertainty
Poloniex plans to shift the majority of its crypto trading operations offshore, according to parent company Circle. The move comes amidst regulatory uncertainty and pressure in the US, which lacks a clear legal framework or guidance for cryptocurrency-related businesses or crypto investors.
Circle CEO Jeremy Allaire says that 70% of Poloniex users are not based in the US, prompting the move to another jurisdiction. Allaire says Poloniex has already secured its Digital Assets Business Act license to operate in Bermuda, reports Coindesk.
“The lack of regulatory frameworks significantly limits what can be offered to individuals and businesses in the US.”
In May, the Delaware-based exchange stopped offering nine coins for its customers in the US due to regulatory uncertainty: Ardor (ARDR), Bytecoin (BCN), Decred (DCR), GameCredits (GAME), Gas (GAS), Lisk (LSK), Nxt (NXT), Omni Layer (OMNI) and Augur (REP).
The CEO also confirmed that the company’s recent downsizing, eliminating roughly 30 employees, was partly due to the lack of clarity from US lawmakers. The company’s current focus is global and getting beyond the US bottleneck.
“It took a long time working with the Bermuda government and the Bermuda Monetary Authority.”
“The project to establish a new international operations hub for our market, exchange and wallet services, was a major project.”
The move will also allow Poloniex to explore being able to offer financial services, adding that users could expect to see more “yield-generating crypto accounts.”
Poloniex ranks in the top 100 crypto exchanges in the world with a 24-hour trading volume of roughly $16 million, according to data compiled by CoinMarketCap. It is also listed among Messari’s Real 10 Volume index reflecting legitimate trading volumes from leading industry players.
In the wake of last week’s two congressional hearings on Facebook’s upcoming digital asset Libra, crypto insiders are assessing the highly critical response from US lawmakers who are determined to halt the project in its tracks. The hearings sparked an intense debate about Bitcoin, cryptocurrencies and new corporate digital assets that are all vying for a place in the digital economy.
Politicians have not yet figured out a way to deal with emerging blockchain technology and the many products and services currently in development to bring more financial inclusion for people all around the world. The threat of digital assets lowering costs, rivaling existing infrastructure and challenging the traditional banking and monetary systems has prompted many prominent politicians, including Maxine Waters and Brad Sherman, to demand a moratorium on Libra.
As for Bitcoin, the decentralized system cannot be halted or stopped by any central authority or government.