The lack of regulatory clarity for crypto startups in the United States continues to force projects to go offshore in search of regulatory-friendly jurisdictions.
On Monday, Circle, the parent company of leading cryptocurrency exchange, Poloniex disclosed plans to join the flock of firms moving offshore. As per the update, Poloniex which has 70% of its users residing outside the United States, obtained a full Digital Assets Business Act license in British Island territory, Bermuda.
The exchange will now use that license to serve their non-U.S customers while the U.S division will continue to meet the needs of clients in their territory.
While speaking to Coindesk about their decision to move a majority of Poloniex’s operations offshore, Circle CEO Jeremy Allaire highlighted that “the lack of regulatory frameworks significantly limits what can be offered to individuals and businesses in the U.S.”
Another factor which likely made the decision an easier one for Circle according to him is that Europe and Asia represent the ‘significant market’ for Poloniex. Asian institutional investors are the primary users of the company’s stablecoin, USDC, Allaire explained.
Interestingly, although Poloniex moving offshore casts the future of the U.S crypto industry into further shadows, it could mean good news for potential employees.
Allaire revealed that in lieu with Poloniex dismissing 30 employees earlier this year to ensure that their ‘costs were in line with the market’, the exchange is set to bring back the same number of workers in the next 24 months to lead their global expansion.
That global expansion according to him would also mean that more assets will be available to Poloniex users who do not reside in the U.S, at least until the country clarifies their stance on cryptocurrencies that are securities.
Meanwhile, we reported in May that Poloniex delisted nine tokens from its platform for U.S users, following concerns that regulators could flag their operations as illegal. A frequent basis for a potential lawsuit would be that the exchange is facilitating the buying and selling of unregistered securities.