Circle/Poloniex move to Bermuda
Circle believes the current regulatory environment in the US may be toxic
Poloniex, the cryptocurrency exchange operated by Circle, is moving out of the US, just as have many crypto companies before it. Concerns are mounting that US regulators might come down hard on any company in the FinTech space and many are looking for alternatives to avoid running into issues later. Circle has announced that it will put Poloniex in Bermuda, where laws regarding crypto businesses are friendly and inviting.
Circle has already received permission from Bermuda to open shop in the island country. It was issued a Digital Assets Business Act (DABA) license, which is a requirement for any business looking to launch in the country, and Circle CEO Jeremy Allaire explains, “Europe and Asia are both pretty significant markets for us in particular [and] the USDC stablecoin is particularly popular with institutional Asian investors.”
The move won’t cause a huge impact for those in the US – only about 30% of the company’s clients are based in the country. However, things could get worse for US-based crypto fans and regulators in the country still can’t decide how to view digital assets. Allaire explains, “While many governments around the world have not kept pace with the regulatory requirements driven by rapid innovation in digital asset businesses and crypto, Bermuda has leapt forward with an exceptionally well designed and comprehensive regulatory framework: the Digital Assets Business Act of 2018 (“DABA”). DABA provides a comprehensive framework for the regulation and oversight of crypto financial services including digital asset issuance, sale and redemption, exchange operations, and custodial services.”
Circle explains that it will be increasing its workforce by 30 employees over the next two years as it turns its new Bermuda headquarters into a major hub. Allaire states, “The project to establish a new international 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.”