Ten state authorities have been looking into Coinbase and its staking services.
The U.S. Securities and Exchange Commission has also filed a lawsuit against Coinbase.
Coinbase CEO Brian Armstrong has allegedly gone back and forth on whether or not the company would relocate outside of the United States due to regulatory uncertainties.
As reported by the Financial Times on August 4, Armstrong said that Coinbase will be “staying in the United States” despite several other crypto businesses contemplating not doing the same in light of the possible threat of legal action from authorities.
Increased Regulatory Scrutiny
Ten state authorities have been looking into Coinbase, and the exchange’s staking services have been the subject of many cease-and-desist orders. The U.S. SEC has also filed a lawsuit against Coinbase.
CEO of Coinbase allegedly said that leaving the United States was “not even in the realm of possibility right now” and that there was no “break glass plan.”
However, owing to the lack of legal certainty, Armstrong allegedly said at a fintech event in London back in April that the exchange may consider moving its base from the U.S. to a more crypto-friendly jurisdiction. He subsequently reassured investors that Coinbase was “100% committed” to the American market.
On June 6, approximately three months after receiving a Wells notice for allegedly providing unregistered securities, the SEC filed a complaint against Coinbase. On August 4th, Coinbase’s legal team submitted a request to dismiss the action.
Potentially far-reaching consequences for U.S. crypto businesses hang on the result of the SEC’s lawsuit against Coinbase. In the XRP vs SEC lawsuit, a federal court determined in July that XRP was not a security. Coinbase’s chief legal officer Paul Grewal is among the lawmakers and solicitors who have used the verdict to defend the industry.