Circle, a blockchain startup backed by Goldman Sachs, is looking to make a big leap outside the highly regulated realm of US crypto industry with the launch and licensing of a new subsidiary in Bermuda.
The crypto unicorn plans to leverage its new regulatory status to provide more services to non-US Poloniex customers.
Circle has secured the so-called “Class F (“Full”) DABA” license which the British Overseas Territory grants to digital asset exchanges, as well as crypto platforms, e-wallets and other operators of similar structures. The approved applicants work under the Digital Asset Business Act 2018, and the supervision of Bermuda’s primary regulator, the Bermuda Monetary Authority (BMA).
The brand new piece of legislation was obviously designed to attract cryptocurrency entrepreneurs, who are moving businesses to locations more welcoming as they face intensifying scrutiny from regulators across the globe.
Bermuda also hopes the new development would create a booming new revenue source while assuring startups their project won’t fall subject to restrictive regulations.
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A response to US regulators
The move comes as Circle has expanded into a wide range of crypto-related business, including Circle Invest, which enables purchases of 11 different coins and Circle Trade, an OTC marketplace that handles turnover of more than $2 billion each month.
Circle also owns crypto exchange Poloniex, which trades over 100 cryptocurrencies, and most recently announced the acquisition of SeedInvest, an alternative trading system licensed under FINRA. There are rumors that Circle will apply for a banking license too.
The takeover of SeedInvest has put the Boston-based digital-asset exchange on a firmer regulatory footing and positions it to offer a broader range of blockchain-based securities. It also allows the platform to perform all operations in a regulatory compliant manner.
After winning the regulatory approval, Circle is now capable of offering blockchain-based securities, under the oversight of the US Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Circle, which is reportedly seeking to raise $250 million in new funding, has been plowing money back into areas other than its flagship exchange Poloniex. The company has recently expanded support to its USD Coin (USDC), a stablecoin pegged to the US dollar, adding more than 100 exchanges, wallets, platforms, apps, and service providers to the ecosystem.