- As the regulators rein in digital assets, there is a growing interest in offshore bank accounts.
- It is tied to last week’s shutdown of three crypto-friendly banks – Silvergate Bank, SVB, and Signature.
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US top cryptocurrency exchange Coinbase is reportedly planning to set up an overseas trading platform to evade the tough regulations in the US, which saw three crypto-friendly lenders slammed last week.
According to unnamed sources who shared information with Bloomberg, the location of the proposed platform remains undisclosed.
Silicon Valley Bank and Signature Bank were closed by the US state authorities last week. At the same time, Silvergate, another bank big on crypto, announced a voluntary liquidation of
its assets, leaving the digital asset space with few options for on-off ramp services.
Signature operated Signet, a round-the-clock real-time network for crypto firms, while Silvergate offered Silvergate Exchange Network, a similar service.
Following the collapse of the three lenders, two of which – SVB and Signature – have since been turned over to the Federal Deposit Insurance Corporation (FDIC), there are speculations about the shutdown of the duo.
Signature Bank’s board member and US Rep. Barney Frank, who shared his views with CNBC, said there was ‘no real objective reason’ that Signature had to be shuttered. ‘‘I think part of what happened was that regulators wanted to send a very strong anti-crypto message. We became the poster boy because there was no insolvency based on the fundamentals,’’ he said.
US regulators refute claims of targeting cryptos
This week, the FDIC dismissed a report Wednesday by Reuters that it wanted Signature Bank’s buyer to keep off cryptocurrencies, saying it neither prohibited nor discouraged banks from offering any service they wish to any sector.
Nonetheless, there is a growing trend of crypto firms seeking offshore bank accounts, according to a report shared with Coindesk by some lenders. Swiss-based Sygnum and Bank Frick in Lichtenstein told the publication that they were receiving growing requests for accounts. SEBA, another lender in Switzerland, said that it was already onboarding cryptocurrency clients.
Dave Weisberger, CEO and co-founder of algorithmic trading platform CoinRoutes, commented: ‘‘There is a very real risk that more crypto companies will move offshore, particularly with the regulatory framework being proposed in the UK and the EU.’’ The trend is also seen in the UAE, embracing crypto innovation, including current plans for an economic free zone for cryptocurrencies.
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