• Coinbase has reportedly explored the possibility of setting up a cryptocurrency trading platform in a jurisdiction outside US regulatory reach.
• This move could expand Coinbase’s offerings to a global client base beyond its existing marketplace, and diversify its risks in case of any US regulatory challenges.
• Establishing a crypto-trading platform outside of the US could provide Coinbase access to new markets and increased liquidity for institutional clients.
Coinbase Explores Establishing Cryptocurrency Trading Platform Outside U.S.
According to a recent report by Bloomberg, Coinbase has explored the possibility of setting up a cryptocurrency trading platform in a jurisdiction outside United States agencies’ regulatory reach.
The Impact Of Increasing Regulatory Scrutiny
With increasing regulatory scrutiny and crypto-friendly banks shutting down operations less than a month apart, the climate for crypto platforms in the US has been worsening. In response to this crackdown against the industry, the largest crypto exchange in the US has taken steps to mitigate the impact on its operations.
Benefits Of Setting Up Exchange Outside The U.S.
Establishing a crypto-trading platform in a jurisdiction outside of the US regulatory sphere could offer Coinbase access to new markets. This move could expand Coinbase’s reach and allow them to tap into previously inaccessible markets. Additionally, this move could increase the exchange’s liquidity for its institutional clients, providing them with more trading options as well as diversifying risks in case of any future US regulatory challenges.
Potential Locations For Crypto Trading Platform
Although establishing a platform overseas could provide Coinbase with greater regulatory flexibility, the exchange will still need to find an appropriate location that is conducive for launching such services legally and securely while also offering attractive tax benefits. Some potential locations include Japan or Singapore – both countries have made significant strides towards creating favorable conditions for businesses operating within their jurisdictions related to cryptocurrencies and blockchain technology innovation projects.
Establishing an offshore crypto-trading platform may be one way for Coinbase to mitigate some of its risk from increasing regulation within the United States while also expanding its offerings beyond its current marketplace by tapping into new markets globally; however, it is important that they choose an appropriate location that is suitable for launching such services legally and securely while also offering attractive tax benefits if they wish to take advantage of this opportunity successfully
• Silicon Valley Bank (SVB) is facing a financial crisis due to the tightening of monetary policies and the Federal Reserve’s hawkish macroeconomic view.
• SVB launched a $1.75 billion securities sale in an attempt to raise capital and recover losses, but this caused further concern among investors.
• Californian regulators have closed down SVB, leaving employees uncertain about their future and investors worried that the bank cannot cover its losses.
Silicon Valley Bank Crisis
Silicon Valley Bank (SVB) has followed the financial freefall amid Federal Reserve (Fed) Chairman Jerome Powell’s hawkish macroeconomic view and tightening policies to control inflation rates. With over 40 years in the market, Silicon Valley Bank is facing a significant downturn in its shares, falling more than 60% since Thursday.
On Wednesday, the go-to bank for venture capitalists and tech startups launched a massive $1.75 billion securities sale to raise capital and try to recoup its earlier losses, raising concerns among investors. According to several reports, the financial institution was closed by Californian regulators.
What Is Happening?
Before today’s events, the Silicon Valley Financial Group was considering options for exiting the crisis, including a sale after the heavy lender sent shockwaves through global markets and battered its shares on the Nasdaq stock market. According to Reuters report, Silicon Valley Bank needed proceeds from this security sale to plug a $1.8 billion hole caused by selling a $21 billion loss-making bond portfolio consisting primarily of U.S Treasuries. Investors were concerned if capital raised would be enough cover losses as technology sector that bank serves was affected by inflation control policies resulting in decline of fortunes of tech startups – leading up to current situation with SVB being shut down by California regulator till further notice.
Silicon Valley Bank CEO Gregory Becker has been calling customers to assure them their capital is “safe” in the bank which ultimately proved inaccurate due uncertainty around next steps after closure of bank by regulators .
This financial crisis with Silicon Valley Bank is one of largest failures in history as it’s core customer base – venture capitalists & tech startups are struggling due tightening of monetary policies & Fed’s macroeconomic view which resulted in closure of SVB by California regulators till further notice with uncertain future ahead & concerns around whether capital raised will be sufficient enough cover all losses incurred till now..
• Silvergate shares experienced a significant decline of nearly 60% on Thursday due to business partners and investors leaving abruptly.
• The company was unable to submit its annual report on time to the US Securities and Exchange Commission (SEC).
• Several other crypto firms, including Galaxy Digital, Coinbase, and Paxos Trust, have decided to stop accepting or initiating payments through Silvergate.
Silvergate Shares Plummet after Financial Instability
Silvergate shares experienced a significant decline of nearly 60% on Thursday due to both business partners and investors leaving abruptly to avoid financial instability. The drop was the largest ever seen for Silvergate. On Wednesday, Silvergate announced that it was unable to submit its annual report on time to the US Securities and Exchange Commission (SEC).
Analysts Downgrade Ratings
As a result, three analysts downgraded their ratings of the stock, with one removing their price target altogether because of the significant level of uncertainty surrounding the company. JPMorgan downgraded Silvergate from “neutral” to “underweight” after the company announced it was assessing its ability to continue operating as a going concern. Canaccord Genuity Group downgraded the bank to “hold,” while Compass Point Research & Trading LLC downgraded it to “neutral”.
FTX Contagion Rattles Silvergate Shares
The crypto market has been impacted by the aftermath of the FTX collapse, and Silvergate has been directly affected since the bank had approximately $1 billion in deposits from the now-defunct exchange when it collapsed. Additionally, several other crypto firms, including Galaxy Digital, Coinbase, and Paxos Trust, have decided to stop accepting or initiating payments through Silvergate. This exodus poses a major risk to the bank’s primary source of deposits and its role as a platform for crypto participants to transfer money between one another.
Coinbase Ceases Payments with SilverGate
Coinbase released a statement shared on Twitter saying “In light of recent developments and out of an abundance of caution Coinbase is no longer accepting or initiating payments To or from SilverGate” At Coinbase all client funds continue to be safe accessible & available.
Regulatory Issues Stirring The Pot
More than $11 billion in assets are frozen at FTX which could prompt regulators into taking further action against other exchanges who may be using similar tactics as those used by FTX before they collapsed .This could create more issues for silver gate if they are found not compliant with regulations set forth by government agencies such as FINRA or SEC .