Crypto companies are playing poker with the SEC as agency cracks down on the industry
Major players are hoping that the SEC and Washington takes, what crypto watchers see as bluffs, seriously and soften the hard line that regulators have taken on the industry.
Roman Strelchenko | 500Px Plus | Getty Images
Cryptocurrency companies are playing a game of poker with the Securities and Exchange Commission, making bold threats to leave the U.S. as the regulator steps up pressure on the industry to toe the line.
Major players are hoping that the SEC and Washington takes, what crypto watchers see as bluffs, seriously and soften the hard line that regulators have taken on the industry.
Executives at firms including crypto exchange Coinbase and blockchain services company Ripple have piled on with comments laying into the SEC and signaling plans to shift business overseas, in a bid to rally support and send a message to U.S. politicians concerned that the country may miss out on a key technological innovation.
Coinbase CEO Brian Armstrong said last week that the SEC was on a “lone crusade” with its tough actions against certain crypto companies. He added that Chair Gary Gensler had taken an “anti-crypto view,” despite earlier being a supporter of the industry during his time as an economics professor at the MIT Sloan School of Management.
“The SEC is a bit of an outlier here,” Armstrong told CNBC’s Dan Murphy in an interview in Dubai. “I don’t think [Gensler is] necessarily trying to regulate the industry as much as maybe curtail it. But he’s created some lawsuits, and I think it’s quite unhelpful for the industry in the U.S. writ large.”
Brad Garlinghouse, CEO of Ripple, also tore into the SEC this week. When asked for his message to Gensler as the company announced an expansion into Dubai, he quipped, “Who?” before later saying Ripple will have spent $200 million defending itself against a lawsuit initiated by the regulator by the time it is over.
“I find it as a company that started in the United States and as somebody who is a U.S. citizen, it’s sad. I have sadness about this. The U.S. is getting passed not just by a little bit but by a lot,” Garlinghouse said.
“The tough thing about this is you have a country that I think has put politics ahead of policy and that’s not a good decision if you’re trying to invest in the economy.”
Dubai and Europe have proven to be much more favorable markets with their virtual asset regulatory frameworks, Garlinghouse said, adding: “The United States is definitely stuck.”
Garlinghouse, Armstrong and other crypto bosses have made threats to leave the U.S., highlighting concern from the industry that the SEC’s crackdown is becoming too harsh. The regulator has taken strong enforcement actions against companies including Ripple, Coinbase, Kraken and Paxos, accusing each of flouting securities laws.
The SEC’s contention is that most tokens in the market may qualify as securities, which would subject them to much stricter requirements around registration and disclosure. Crypto firms, naturally, have denied assets they issue or list on their platforms should be treated as securities.
Will they stay or will they go?
The question is: could they actually leave? It looks pretty unlikely.
“The U.S. is one of the largest markets for crypto, and hence it is highly unlikely that they will leave,” Larisa Yarovaya, associate professor of finance at Southampton University, told CNBC via email.
“The biggest fear of crypto companies is that regulation will cause panic among crypto investors and prices will go down. To look confident (even arrogant) is a common tactic of crypto company CEOs. They think this will translate into investors’ confidence, overconfidence in some cases, and will encourage further irrational behaviour among investors, e.g. HODL [hold on for dear life] even when markets are falling.”
Ripple’s Garlinghouse has been threatening to move his company’s headquarters overseas since 2020. In October that year, he said the U.K., Switzerland, Singapore, Japan and the United Arab Emirates were under consideration for Ripple’s potential move abroad.
That hasn’t happened yet.
Coinbase’s chief, meanwhile, suggested at a London fintech conference in April that the firm would consider options of investing more abroad, including relocating from the U.S. to elsewhere, if the exchange doesn’t get regulatory clarity in the U.S.
A month later, Armstrong said Coinbase “is not going to relocate overseas.”
“We’re always going to have a U.S. presence … But the U.S. is a little bit behind right now,” he told CNBC.
The U.S. is a huge market for the industry, with over 50 million Americans saying they own some crypto, according to a survey conducted by Morning Consult for Coinbase.
“There’s a much greater focus on the international markets for those firms. But at the top end of the market, personally I just can’t see that ever happening that you leave the United States market completely,” Jonathan Levin, co-founder of Chainalysis, told CNBC in an interview in London.
“It’s more about how much do you invest in new international expansion where maybe that wasn’t as high up on the agenda, but now it’s let’s look at France, let’s look at the U.K.”
On top of this, the practicalities of moving these already large companies out of the U.S. would be tough.
“Although these industries are virtual by their nature, they still need people, and people have families, mortgages, and preferences on where they live. Replacing them with local talent in the new place may be easier said than done,” George Weston, a partner at global offshore law firm Harneys, told CNBC via email.
Regulatory certainty outside the U.S.
Crypto bosses are playing up to some officials’ concerns that the U.S. has become shrouded in regulatory uncertainty while other jurisdictions, like the European Union and U.K., have charged forward with proposed regulatory frameworks for digital assets.
Hester Peirce, a commissioner at the SEC, said at a Financial Times conference last week that the U.S. was “shooting ourselves in the foot by not having a regulatory regime in the U.S.”
She praised the EU on its progress with waving through laws for the crypto industry.
The EU is expected to bring in the first comprehensive set of regulations for digital assets, known as Markets in Crypto Assets (MiCA), sometime in 2024.
“It’s really commendable that Europe was able to get that done so quickly,” Peirce said, according to Reuters. “If we built a good regulatory regime, people would come. I think you will see that with MiCA.”
Diego Ballo Ossio, a partner at law firm Clifford Chance, said other jurisdictions including the U.K. and EU are changing their legislative frameworks to create clear regulatory regimes for exchanges.
“This means that other countries are effectively providing US based exchanges an option – a place to move to. It is not unthinkable that a U.S. exchange decided to create operational hubs in non-U.S. jurisdictions where the product can be safely innovated and enhanced,” he told CNBC.
Binance, the world’s largest crypto exchange, recently said it has become more difficult for the company to operate into the U.S. and that it was minded to establish a regulated operation in the U.K.
Patrick Hillman, the company’s chief strategy officer, said the U.S. “has been very confusing over the past six months,” pointing to the SEC’s actions against Coinbase as a sign of how the country is in a “weird place.”
While the U.S. crypto industry might currently be throwing out empty threats right now, there could be a real issue if regulators in America don’t move forward with thoughtful regulation.
“My conclusion is that I think it is more sabre rattling than a genuine desire to up and leave the U.S., but if the SEC continues down the path it is on, many firms will have no choice but to try another way of doing business. It is existential,” Daniel Csefalvay, a partner at BCLP law firm, told CNBC via email.
Technology
Sam Altman says Meta offered OpenAI staff $100 million bonuses, as Mark Zuckerberg ramps up AI poaching efforts
OpenAI CEO Sam Altman speaks during the Snowflake Summit in San Francisco on June 2, 2025.
Justin Sullivan | Getty Images News | Getty Images
Meta Platforms tried to poach OpenAI employees by offering signing bonuses as high as $100 million, with even larger annual compensation packages, OpenAI chief executive Sam Altman said.
While Meta had sought to hire “a lot of people” from OpenAI, “so far none of our best people have decided to take them up on that,” Altman said, speaking on the “Uncapped” podcast, which is hosted by his brother.
“I’ve heard that Meta thinks of us as their biggest competitor,” he said. “Their current AI efforts have not worked as well as they have hoped and I respect being aggressive and continuing to try new things.”
Meta did not immediately respond to a request for comment from CNBC.
The Meta CEO is personally trying to assemble a top artificial intelligence team for its “superintelligence” AI lab and has invested heavily in AI through its Meta AI research division, which also oversees its Llama series of open-source large language models.
The moves come after Meta had once again delayed the release of its latest flagship AI model due to concerns about its capabilities, according to a report from the Wall Street Journal.
Meanwhile, sources have previously told CNBC that Zuckerberg has become so frustrated with Meta’s standing in AI that he’s willing to invest billions in top talent.
Last week Alexandr Wang, founder of Scale AI, announced he was leaving for Meta as part of a deal that saw the Facebook parent dish out $14.3 billion for a 49% stake in the AI startup. Wang added that a small number of Scale AI employees would also join Meta as part of the agreement.
The Times had previously reported that Wang would head a research lab pursuing “superintelligence,” an AI system that surpasses human intelligence.
The company has also recently poached other top talent, including Jack Rae, a principal researcher at Google’s AI research laboratory DeepMind, according to a report from Bloomberg. The report added that Zuckerberg had been directly involved with the recruitment efforts.
Speaking on the podcast, which was released on Tuesday, Altman said that Meta’s strategy of offering a large, upfront, guaranteed compensation would detract from the actual work and not set up a winning culture.
“I think that there’s a lot of people, and Meta will be a new one, that are saying ‘we’re just going to try to copy OpenAI,'” he added. “That basically never works. You’re always going to where your competitor was, and you don’t build up a culture of learning what it’s like to innovate.”
However, spending big on startups and their talent is nothing new to the AI space. Former Apple chief design officer Jony Ive joined OpenAI after the company acquired Ive’s AI devices startup io through a $6.4 billion all-equity deal last month.
Some tech analysts have also pushed back against the notion that Meta has been missing the mark on AI.
“They basically built the rails for open source AI development, and so much of what is happening in AI is being built on Meta,” Daniel Newman, CEO at Futurum Group, told CNBC’s “Power Lunch” last week.
Open-source generally refers to software in which the source code is made freely available on the web for possible modification and redistribution. Llama’s open-source characteristics have allowed many third-party applications to be built on top of it.
Newman added that Meta’s massive investments, such as in ScaleAI, will continue to push it forward in training its behemoth models.
Muhammed Selim Korkutata | Anadolu | Getty Images
For a third time since taking office in January, President Donald Trump plans to extend a deadline that would require China’s ByteDance to divest TikTok’s U.S. business.
“President Trump will sign an additional Executive Order this week to keep TikTok up and running,” White House Press Secretary Karoline Leavitt said in a statement. “As he has said many times, President Trump does not want TikTok to go dark. This extension will last 90 days, which the Administration will spend working to ensure this deal is closed so that the American people can continue to use TikTok with the assurance that their data is safe and secure.”
ByteDance was nearing the deadline of June 19, to sell TikTok’s U.S. operations in order to satisfy a national security law that the Supreme Court upheld just a few days before Trump’s second presidential inauguration. Under the law, app store operators like Apple and Google and internet service providers would be penalized for supporting TikTok.
ByteDance originally faced a Jan. 19 deadline to comply with the national security law, but Trump signed an executive order when he first took office that pushed the deadline to April 5. Trump extended the deadline for the second time a day before that April mark.
Trump told NBC News in May that he would extend the TikTok deadline again if no deal was reached, and he reiterated his plans on Thursday.
Prior to Trump signing the first executive order, TikTok briefly went offline in the U.S. for a day, only to return after the president’s announcement. Apple and Google also removed TikTok from the Apple App Store and Google Play during TikTok’s initial U.S. shut down, but then reinstated the app to their respective app stores in February.
Multiple parties including Oracle, AppLovin, and Billionaire Frank McCourt’s Project Liberty consortium have expressed interest in buying TikTok’s U.S. operations. It’s unclear whether the Chinese government would approve a deal.
— CNBC’s Kevin Breuninger contributed to this report
WATCH: Project Liberty’s bid for TikTok is aligned with U.S. national security priorities.
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