Galaxy Digital will move more of its operations offshore, Mike Novogratz says. High-profile collapses have created a “regulatory headache” for the crypto firm in the US, he told analysts. “We still have a hangover … from the denting of trust that FTX and other bad actors in the space created,” Novogratz added. Loading Something is loading.
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Crypto investing giant Galaxy Digital is set to move more of its operations offshore because of a difficult regulatory environment in the US, its CEO Mike Novogratz said Tuesday.
The billionaire investor and bitcoin bull told analysts that the collapse of high-profile digital asset firms including failed exchange FTX have led to a crackdown in the US, leading to Galaxy focusing on accelerating growth abroad.
“When I look at the short term, we still have a regulatory headache in the United States,” Novogratz said on a conference call after the firm published its first-quarter earnings. “I don’t see that breaking anytime soon.”
“We still have a hangover, as well, from the denting of trust that FTX and other bad actors in the space created,” he added.
Novogratz believes that crypto has entered a period of short-term “stasis” in the US because financial watchdogs like the Securities and Exchange Commission will continue to “regulate with lawsuits.”
American regulators launched a crypto crackdown after FTX imploded in November, targeting exchanges including Binance US, Kraken, and Gemini. The increased scrutiny has prompted some firms to open offices elsewhere.
Galaxy recently added a new team of traders in Hong Kong, while Coinbase CEO Brian Armstrong told Bloomberg TV on Monday that his firm is evaluating the United Arab Emirates as a potential new crypto hub.
Bitcoin has started the year on a tear despite regulatory pressures, rallying 67% after a dismal 2022.
Those gains boosted Galaxy’s bottom line as well, with the investment firm logging first-quarter net income of $134 million Tuesday, compare to a $288 million loss in the three months ending December 31.
Galaxy’s Toronto-listed shares edged up just under 1% after it posted its latest earnings report, trading at just over 5 Canadian dollars at the closing bell.
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