In a preemptive move to avoid any new regulations the U.S. government could decide to drop on cryptocurrency companies, Circle has decided to transfer its exchange operations to Bermuda. It’s another example of the U.S. missing out on FinTech innovation as the country continues to lag behind virtually the entire world in establishing a fair and moderated environment within which crypto companies can operate.
Circle owns the Poloniex crypto exchange and the transition to Bermuda was made possible by the issuance of a Digital Assets Business Act (DABA) license issued to Poloniex from that country. Jeremy Allaire, the CEO of Circle, says that the Bermuda office will manage all of the company’s users, of which around 70% reside outside the U.S. He added, “Europe and Asia are both pretty significant markets for us in particular [and] the USDC stablecoin is particularly popular with institutional Asian investors.”
Circle says in the press release, “While many governments around the world have not kept pace with the regulatory requirements driven by rapid innovation in digital asset businesses and crypto, Bermuda has leapt forward with an exceptionally well designed and comprehensive regulatory framework: the Digital Assets Business Act of 2018 (“DABA”). DABA provides a comprehensive framework for the regulation and oversight of crypto financial services including digital asset issuance, sale and redemption, exchange operations, and custodial services.”
U.S. regulatory limitations, and the multiple definitions assigned to crypto assets from different departments within the government, are hindering blockchain and crypto growth in the country. Many of the financial services that are now available through Poloniex to users in other countries are still not available to U.S. residents because of the lack of clarity and there is no indication that a strong regulatory foundation for FinTech is going to be introduced in the U.S. anytime soon.
Now out of the clutches of U.S. regulators, Circle will expand its workforce by around 30 employees over the next 24 months as it develops a large global policy. Allaire adds, “The project to establish a new international hub for our market, exchange and wallet services, was a major project. It took a long time working with the Bermuda government and the Bermuda Monetary Authority.”
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