Circle Exchange Moves Operations to Bermuda; United States Unclear Crypto Regulations To Blame?
- The crypto trading desk for Circle has one of the largest liquidity pools for digital asset trading.
- Due to strict regulations in the United States, the platform has moved their operations to Bermuda.
The regulatory atmosphere in the United States has put a lot of pressure on cryptocurrency exchanges that wish to operate within their jurisdiction. As a result, crypto company Circle has decided that the pressure is too much, opting to move much of its exchange operations to a new office in Bermuda, according to reports from Forbes.
— Circle (@circlepay) July 22, 2019
Circle officially announced the Digital Assets Business Act license that they’ve secured in Bermuda on Monday, allowing for the operation of the Poloniex crypto exchange. This issuance makes Circle the first major cryptocurrency exchange and wallet service to receive the Class F permit.
The chief legal officer for Circle, Gus Coldebella, told Forbes,
“We’ve always been advocates for forward looking regulatory clarity on digital assets. That being said, we’ve been searching the world for jurisdictions that met our criteria, but that were also deeply focused on regulatory compliance. We evaluated a number of places to base our international operations in and Bermuda was a perfect fit. Under the DABA license, Circle will be able to operate a suite of regulated crypto financial services for our international customer base, including expanded digital asset product offerings.”
Circle CEO Jeremy Allaire stated that the Poloniex user base is primarily comprised of 70% United States users, but the office in Bermuda will be handling those accounts going forward. Some people may remember that, in May, the company geofenced some of their assets, keeping U.S. customers rom using them. However, the platform continues to serve about eight million customers around the world.
“Europe and Asia are both pretty significant markets for us in particular. The lack of regulatory frameworks significantly limits what can be offered to individuals and businesses in the United States.”
Still, despite these restrictions, the crypto trading desk for Circle averages $2 billion in monthly volume, making it one of the largest liquidity pools for digital asset trading.
Earlier this year, in an effort to determine if Circle’s costs “were in in line with the market,” the platform laid off about 30 employees. These cuts primarily had to do with the regulatory uncertainty that Circle was facing in the United States, but the platform has stated that it will be hiring the same number of people over the next two years. Though it is unclear if the same employees are eligible for rehire, the positions may require the additional employees to take on different roles with a greater focus on the global market.
Speaking with CoinDesk, Allaire said,
“The project to establish a new international operations 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.”
Now, as the company moves forward, Allaire states that a more diverse range of assets will be available to customers around the world, and that financial services may be expanded for Poloniex in the near future. Though he didn’t provide additional details about the types of products and services that may be offered soon, users may soon notice more “yield-generating crypto accounts,” which are similar to what Cosmos and Stellar offer in their staking services.