Renowned crypto lawyer John Deaton has cautioned that offshore locations may not offer the safe haven that some cryptocurrency firms hope for in the face of increasing U.S. regulatory scrutiny.
The lawyer emphasized in his Twitter post:
Agree 💯
— John E Deaton (@JohnEDeaton1) April 23, 2023
Plus, the international border is an illusion. Even if one tries to avoid offering to U.S. customers, U.S. agencies can easily establish jurisdiction (email, U.S. 🏦 wire) claiming there was an intent to reach U.S. customers via secondary sales. We must fight back. https://t.co/GY2vnPGTUo
Deaton’s warning comes in response to a tweet by Messari founder Ryan Selkis, who argued that moving crypto businesses offshore is a short-term and costly approach. Deaton pointed out that regulatory authorities in the United States have the ability to readily establish jurisdiction over corporations located abroad if they have reason to believe that the companies have the intention of selling their products to consumers in the United States via secondary channels.
He stressed how important it was for the cryptocurrency industry to fight back against the increasing reach of regulations.
Selkis argued that the United States, with its large financial market, reserve currency, and robust software economy, offers a much more conducive environment for the growth of the cryptocurrency sector. He also highlighted the significance of constitutional rights enshrined in the 1st, 2nd, 4th, 5th, and 10th Amendments.
In the midst of tightening regulations, Coinbase, the largest crypto exchange in the U.S., has plans to move offshore and has already obtained a license from Bermuda. Huobi’s Justin Sun has praised Brian Armstrong, Coinbase CEO, for this move.
However, the U.S. Securities and Exchange Commission (SEC) and its chair, Gary Gensler, continue to increase their grip on crypto companies. Businesses in the crypto sector must assess the advantages and disadvantages of relocating overseas as they negotiate the evolving regulatory landscape.
