Circle Relocates Exchange Business to Bermuda
On July 23rd, cryptocurrency payment firm Circle announced through a blog post by founders Sean Neville and Jeremy Allaire that due to increasing regulatory uncertainty in the United States, serving US clients has become significantly more challenging. The company revealed plans to relocate its cryptocurrency exchange operations overseas, with its Poloniex platform having already secured full licensing under Bermuda's Digital Assets Business Act (DABA).
Why Bermuda?
Bermuda's progressive regulatory framework appears to be the key attraction:
- Implemented DABA legislation as early as 2018
Provides comprehensive oversight for:
- Digital asset issuance and redemption
- Exchange operations
- Custodial services
- Incorporates FATF standards for AML/CFT compliance
Circle claims the distinction of being the first major crypto financial firm to obtain a full "Class F" DABA license, covering payment services, custody, trading, and other digital asset financial services.
Operational Changes
The transition brings several immediate changes:
- Non-US clients will access Poloniex through Circle's new Bermuda entity
- Expanded crypto asset listings and advanced trading products available internationally
- US clients temporarily excluded from new services due to regulatory constraints
- Existing operations in the US, Ireland, UK, and Hong Kong continue unaffected
👉 Explore secure crypto trading alternatives
Circle's Evolutionary Path
Wikipedia records show Circle's fascinating transformation:
- Founded in 2013 as a peer-to-peer payments technology company
- Originally focused on mobile payments (Circle Pay platform)
- Entered crypto space in 2015 with BitLicense approval
- Expanded to UK in 2016 with virtual currency license
Discontinued bitcoin exchange services in late 2016
- Founder Allaire cited misalignment with original payment-focused vision
The company raised $135M+ across four funding rounds (2013-2016), with notable investors including:
- Goldman Sachs ($50M lead)
- Bitmain
- Wanxiang Group
- Baidu Capital
The Poloniex Acquisition
Circle's 2018 acquisition of Poloniex ($400M) marked its formal entry into exchange operations, though the platform had already seen:
- Market share decline from 58% (April 2017) to 1% at acquisition
- Increased competition and regulatory pressures
Allaire described Circle's three-pronged product strategy:
- Circle Pay (consumer crypto payments)
- Circle Trade (institutional OTC platform)
- Poloniex (exchange operations)
US Regulatory Landscape Intensifies
2023 has seen increasing regulatory pressure driving several exchanges to relocate:
- Bittrex: Stopped offering 32 tokens to US users
- Gate.io: Suspended 19 tokens for US traders including USDT, EOS, XRP
Industry analysts attribute these moves to:
- Lack of clear regulatory frameworks for altcoins
- Growing compliance risks for exchanges
- Need for regulatory certainty to foster innovation
👉 Global crypto trading solutions for professionals
Looking Ahead
Crypto executives consistently express frustration with:
- Absence of clear US regulatory frameworks
- Potential for other nations to gain blockchain infrastructure advantage
As Jeremy Allaire noted:
"The lack of regulatory framework severely limits what services can be offered to US individuals and businesses."
With its Bermuda relocation, Circle plans to:
- Focus on global market expansion
- Hire 30 additional staff within 24 months
- Develop services beyond US regulatory constraints
FAQ: Cryptocurrency Exchange Relocations
Q: Why are crypto exchanges leaving the US?
A: Primarily due to increasing regulatory uncertainty and compliance challenges regarding altcoin trading.
Q: What advantages does Bermuda offer crypto businesses?
A: Clear digital asset regulations (DABA), FATF-compliant AML/CFT standards, and comprehensive licensing frameworks.
Q: Can US citizens still use Poloniex?
A: Currently, only non-US clients can access Poloniex through Circle's Bermuda entity for full services.
Q: How does this affect Circle's other operations?
A: US, Irish, UK, and Hong Kong operations continue unaffected—only exchange services relocate.
Q: What was Circle's original business focus?
A: Peer-to-peer payments and mobile wallet services before expanding into cryptocurrency.
Q: Will more exchanges follow this trend?
A: Industry analysts predict continued relocation unless US establishes clearer crypto regulations.