Coinbase is on the brink of legal warfare with the Securities and Exchange Commission (SEC) to reach long-awaited clarity on how federal securities laws apply to the crypto industry, according to CEO Brian Armstrong. 

Should the regulator situation not improve, the executive said the exchange would consider relocating away from the United States. 

Will Coinbase Move Abroad?

In an interview with CNBC on Tuesday, Armstrong called out “certain regulators” for taking a “regulation by enforcement approach” to crypto in the US – a term he’s previously used to describe the SEC’s treatment of the industry. Given this aggressive approach, he admitted that Coinbase was already assessing other countries for potentially setting up new headquarters. 

“The UK is actually a very good one for us,” said the CEO. The region, he noted, is Coinbase’s second-highest revenue country, and its leaders have expressed promising interest in turning the nation into a Web3 hub. 

Coinbase in particular is under fire from the SEC, which issued the firm a Wells Notice earlier this month, which is a notice warning of the intention to sue the company. It stated that Coinbase had violated federal securities laws, which Armstrong suspects are related to the assets listed on the exchange, as well as its staking as a service product. 

The CEO said that the SEC had never notified the exchange about what it could be doing better to remain compliant across 30+ meetings over the last year. 

“I think we’re going to have to actually end up going to court to get the clarity we need and create the case law,” he said, referring to judicial precedent. 

A Multi-Year Legal Battle

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