Crypto Firms Join Coinbase to Flee the US and Establish Base in Bermuda

The strong regulatory action in the United States over the last few months is forcing crypto firms in the country to shift base and establish their operations in the crypto-friendly nation of Bermuda.

Since the collapse of crypto exchange FTX, top US regulators such as the SEC and others have gone hammer and tongs after crypto firms including top exchanges like Binance, Coinbase, Kraken, Bittrex, and others.

It’s not a new thing that crypto firms have been selecting offshore locations to set up base and establish their operations. Prior to the fall of crypto exchange FTX back in November 2022, the Bahamas was one of the most-preferred destinations for crypto firms.

However, Bermuda has become the new Bahamas after Coinbase secured a monetary license from the Bermuda Monetary Authority to operate in the region. Many in the crypto space have been criticizing the regulatory approach undertaken by the US I.e. of regulations through enforcement instead of regulations via dialogue. On the other hand, the US Congress has been quite laggard in comparison to other global jurisdictions in establishing the rules for the crypto industry.

On the other hand, Bermuda over the last five years has been building and fine-tuning its digital asset framework by enacting the Digital Asset Business Act. Thus, they established a licensing regime for issuing, selling, and redeeming crypto assets, as well as creating a license for operating as a crypto payments service provider or an electronic exchange.

Over the last five years, Bermuda has granted license to some of the prominent crypto market players including USDC stablecoin issuer Circle as well as Block and its subsidiary Cash App. During an recent interview at the Consensus 2023 conference in Austin, Texas, Bermuda Premier E. David Burt said:

“What Coinbase recognized, which is what a lot of other companies have recognized, is that we have a superior regulatory environment. It is, as I’ve said, a race to the top for regulation, and Bermuda has proven that we are a place that you can do that.”

Burt has been quite active in the crypto space and has been attending conference regularly. He recalled his recent visit with US policymakers including the SEC, the Treasury Department, and other members of Congress. “It's unfortunate what has happened in the United States,” Burt said. “Not everyone in Congress is clueless to what is going on. There are some really good voices that are trying to get this stuff done. But as you know, they're suffering from a little bit of an FTX hangover.”