Skip to content

Crypto exchanges are fleeing the US

The most important crypto exchange revealed that it had received 18 citation requests from US authorities.

Despite being based in Switzerland, the United States government submitted 30 percent of all applications received.

A warning to crypto exchange

Earlier this month, Kraken, another major crypto exchange, published its transparency report. The firm revealed that more than 66 percent of the applications were filed by the government of the United States.

The company emphasized that only 20 percent of its user base is comprised of investors based in the United States and the rest in Europe.

“The United States is about 1/5 of the clients, but 2/3 of the requests, the agencies in the United States are much more active, and much less surgical, for many requests, we have no coincidences.” It would not be surprising to discover that the same citations are sent to everyone in the hope that a match will be found, “said Kraken.

It’s not only crypto

The overwhelming requests of Know Your Customer (KYC) submitted by the United States government are not exclusive to crypto. The US authorities have put pressure on other sectors, including financial technology, to deal with a broad range of regulatory issues to a large extent.

Speaking with Bloomberg, Tribe Capital co-founder Arjun Sethi said venture capital investors have begun to focus on a company’s ability to handle regulatory pressure due to the growing demand for data from the US government.

“When we meet with companies, in addition to talking about the product, the market and the team, we also dedicate time to how they will be executed in a regulatory environment. That means hiring the right kind of people focused on compliance and best practices”, said Sethi.

It is said that cryptographic companies like Coinbase employ more than a dozen employees who are tasked with dealing with regulators.

Moving from the United States?

Regardless of whether a company is based in or outside the US UU., The US authorities. UU They file KYC applications for cryptocurrency, fintech or finance related businesses at will.

ShapeShift, for example, is headquartered in Switzerland, and a relatively large part of the data requests it received in 2018 came from the US. UU

Even for a company like ShapeShift, which handles primarily cryptocurrency transactions in a less strict and more flexible environment compared to fully regulated exchanges, it is possible for authorities to request user data because transactions on the platform are transparent.

What the firm said

They can do this because for the sake of transparency, ShapeShift has always made all transactions public through our system, unlike any bank or traditional finance company. When completing any order from a client, the details of the transaction are published on our website and through our APIs.

Relocation outside the US UU It does not provide protection for new companies not to deal with the US government. UU In the long term, compliance is likely to become a central point of discussion for venture capital firms and potential angel investors due to the high costs of dealing with hundreds of applications annually.

Published inCryptocurrencies

Be First to Comment

Leave a Reply

%d bloggers like this: