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U.S. crypto firms are looking to establish footholds abroad amid the recent regulatory and legal crackdown, and on late Wednesday night and early Thursday morning, two high-profile exchanges announced updates in their push outside U.S borders.
Gemini, founded by billionaire twins Cameron and Tyler Winklevoss, said it soon will apply for a digital assets license in Dubai, United Arab Emirates. And Crypto.com, famous for its sponsorship of the Los Angeles basketball arena home to the Lakers and Clippers, announced that it had secured a license in Singapore.
“Singapore continues to be a hub for blockchain and fintech innovation,” Chin Tah Ang, general manager of Crypto.com’s operations in Singapore, said in a statement. And Gemini wrote on Twitter that its application for a license in the United Arab Emirates “will be taking another step towards making Gemini a truly global company.”
1/ We’re coming to the UAE! ????????
We’re thrilled to announce that Gemini will soon begin the process of acquiring a crypto license to serve customers based in the United Arab Emirates (UAE). pic.twitter.com/Ycdj9RxMbE
— Gemini (@Gemini) June 1, 2023
Gemini and Crypto.com’s international expansions are just two more examples of crypto firms in the U.S. searching for stable bases abroad, as a suite of actions and threats from federal and state agencies against prominent companies in the industry has led some to conjecture that there’s a coordinated “Operation Chokepoint 2.0” afoot among regulators.
Following the collapse of FTX in November, the Securities and Exchange Commission sued Gemini and Genesis, a crypto lender, for allegedly selling unregistered securities through their joint, yield-bearing product Gemini Earn.
Then, the agency continued to file a flurry of lawsuits and threats, targeting American exchange Kraken, which agreed to discontinue its staking services and to pay a $30 million fine. It also alleged that Do Kwon, the disgraced founder of TerraUSD, and Justin Sun, the founder of TRON, committed fraud and sold unregistered securities.
And it’s even sent Wells Notices, letters informing companies of possible impending legal action, to Coinbase and Paxos, two companies that have styled themselves as rule-abiding and eager to work with and abide by regulators.
Coinbase has since opened up a derivatives branch in Bermuda, Gemini has done the same in Singapore, and Kraken has announced that it’s secured a digital assets license in Ireland. And others are looking to emerging crypto hubs like Hong Kong or the European Union as they flesh out and codify crypto regulation—as opposed to the U.S., which hasn’t passed any comprehensive legislation regarding the industry.
“I think the U.S. has the potential to be an important market for crypto, but right now we are not seeing that regulatory clarity that we need,” Brian Armstrong, founder and CEO of Coinbase, said during a recent conference in London. “I think, in a number of years, if we don’t see that regulatory clarity emerge in the U.S., we may have to consider investing more elsewhere in the world.”
