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Galaxy Digital will move more of its operations offshore because of a ‘regulatory headache’ in the US, billionaire crypto bull Mike Novogratz says

Mike NovogratzGalaxy Digital will move more of its crypto operations offshore, billionaire investor Mike Novogratz said Tuesday.

Lucas Jackson/Reuters

  • 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.

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.

Read more: From Sam Bankman-Fried’s arrest to bitcoin plunging below $20,000, here are the 9 craziest crypto stories of 2022

Read the original article on Business Insider