Coinbase’s CEO says the company may move its headquarters to the UK if regulatory progress in the US remains stalled.

Coinbase is on the brink of a legal battle with the U.S. Securities and Exchange Commission (SEC) in an effort to achieve long-awaited clarity on how federal securities laws apply to the cryptocurrency industry, Coinbase CEO Brian Armstrong said.

If the situation with regulators does not improve, the executive said the exchange would consider moving out of the United States.

Will Coinbase move abroad?

In an interview with CNBC on Tuesday, Armstrong called on “certain regulators” to take an “enforcement approach” to cryptocurrencies in the U.S., a term he has previously used to describe the SEC’s approach to the industry. Given that aggressive approach, he acknowledged that Coinbase is already evaluating other countries for the possibility of setting up a new headquarters.

“The UK has actually been very good for us,” the CEO said. He noted that the region is Coinbase’s second-highest revenue country and that its leaders have expressed interest in transforming the country into a Web3 hub.

Coinbase has come under particular fire from the SEC, which sent the company a Wells Notice earlier this month warning it of its intent to sue it. It said Coinbase had violated federal securities laws, which Armstrong suspected had to do with the assets listed on the exchange and its staking as a service offering.

The CEO said the SEC never notified exchanges it could do better to stay compliant during more than 30 meetings over the past year.

"I think we're going to have to ultimately go to court to get the clarity that we need and develop case law," he said, referring to judicial precedent.

Years of legal battle

One of the SEC’s most high-profile, ongoing crypto industry lawsuits began with Ripple in December 2020, when the agency claimed that the company’s XRP token was an unregistered security. Armstrong said Coinbase is prepared for its own lawsuit with the agency to turn into a similar, years-long debacle if that’s what it takes to get legal clarity.

“We never seek litigation, but in this case, it appears that they initiated it,” he said, adding, “The law is on our side.”

On the other hand, the SEC is at war with Grayscale, the world’s largest Bitcoin fund, which sued the agency last June for “arbitrarily” refusing to approve the company’s application to launch a Bitcoin spot ETF.

During the first oral hearing in the case in early March, the court judge was skeptical of the SEC’s arguments that there were significant differences between the requirements for approving a Bitcoin futures ETF and a spot ETF, an event that caused GBTC to surge 16% that day.