Blockchain Capital mulls emerging crypto hub move amid US crackdown

Blockchain Capital, one of the crypto sector’s most active venture investors, is weighing the benefits of several en vogue international crypto hubs amid a sector crackdown by authorities in the United States.

Bart Stephens, founder and managing partner of the San Francisco-based company, said in a statement to The Block that it is “no secret that the current administration has become overtly hostile to crypto by allowing Elizabeth Warren and Gary Gensler to decide what next-generation internet and financial technology will be available to Americans.”

“While the U.S. is offshoring blockchain technology innovation, other jurisdictions like the UK, the UAE, and Hong Kong are actively courting U.S. entrepreneurs and venture capital firms like Blockchain Capital. Crypto is a global industry and is based on the concept of decentralization so we are exploring decentralizing our financial and human capital,” he added.  

Migration patterns

The news comes during a period of drastic action by U.S. regulators in the wake of FTX’s collapse late last year.

This year alone, the Securities and Exchange Commission has filed charges against multiple crypto outfits including Justin Sun and his companies, along with Bittrex and Gemini, and some celebrities for endorsing cryptocurrencies. Concurrently, two crypto-friendly banks in the U.S. — Silvergate Bank and Signature Bank — were shut down by regulators, leaving precious few banking options for startups in the space.

Numerous U.S. crypto firms are now mulling where best to base their operations, including the likes of Coinbase, the Nasdaq-listed exchange operator. The company recently secured a license to operate an international exchange out of Bermuda, where it plans to offer derivatives trading; has praised the UAE’s approach to governing the crypto sector; and expanded the services it offers in Singapore.

“The message here is the world is sort of moving on with or without the U.S. and we are very committed as a global company to keep moving forward on international expansion,” said Hassan Ahmed, country director for Singapore at Coinbase.

A pro-crypto regime

Blockchain Capital is one of the crypto sector’s most prolific investors. Founded in 2013, it has backed over 160 companies in the space and manages some $2 billion in assets, according to its website. The Block Research’s data suggests it is among the sector's 25 most active venture investors in the past six months with 12 deals.

A spokesperson for the company said that where it ultimately chooses to expand will depend on which jurisdiction boasts the most pro-crypto regulatory framework. Authorities in both Hong Kong and the UAE have been actively engaged in crafting more welcoming regimes for crypto firms this year.