Crypto firms may leave the US due to the SEC’s latest crackdown.

Some experts in the industry believe that the SEC’s recent actions against blockchain companies based in the U.S. and the Cayman Islands’ Binance could ultimately benefit companies operating in the U.S. by providing regulatory clarity. However, in the short to medium term, these actions could force these companies to redirect their efforts elsewhere.

Jason Allegrante, Chief Legal and Compliance Officer at infrastructure firm Fireblocks, stated that “regulatory pressure does create an incentive for exchanges to move overseas; for the digital asset industry specifically, it’s a much easier shift because there are no factories to move.”

Blockchain recently announced that it has obtained a license to offer its services in Bermuda, where it intends to establish a crypto-trading platform outside the U.S. The exchange is also increasing its operations in Canada, which has tightened regulations for crypto companies but has allowed blockchain to sign an enhanced Pre-Registration Undertaking, indicating its intention to comply with the upcoming new regulatory framework.

“I suspect we will see more and more moves like this,” said Andrew Lawrence, co-founder and CEO of Censo Inc., an on-chain custody solution. “Yes, the U.S. is the biggest market, but people who are building in the crypto industry are doing so not because of the size of the market now, but because of the size of the market in the future and people are seeing that this future is not looking good in the United States.”

Ben Caselin, Vice President & Chief Strategy Officer at centralized crypto exchange MaskEX, agrees. “All eyes are now set on other jurisdictions,” he said. “This is not the best time for crypto startups in the U.S. Larger players such as blockchain are able and should engage the regulator to come to solutions, but entrepreneurs and small businesses in crypto are probably better off in other jurisdictions.”

SEC chief Gary Gensler, for his part, does not seem too concerned about the possibility of crypto companies leaving the U.S. On Tuesday, he told Bloomberg TV that “we don’t need more digital currency… we already have digital currency, it’s called the U.S. dollar.”

Allegrante of Fireblocks stated that even though the U.S. may be the most lucrative market for some exchanges, that may not be enough reason for them to focus exclusively on it. “When a company publicly announces plans to establish exchange operations outside of the United States, you can assume that there are plans in place to shift that balance over time,” Allegrante said regarding blockchain.

At the same time, the U.S. market cannot be easily ignored.

“The U.S. market was supposed to deliver the next major wave of crypto interest, so it will be hard to completely abandon it,” said Edward Moya, senior analyst at foreign exchange Oanda.

Even after the SEC warned blockchain about law enforcement action against the exchange in March, CEO Brian Armstrong said that the exchange remains “100% committed to the U.S.” In response to the lawsuit, blockchain stated that it will continue to focus on operating in the U.S.

Mark Palmer of brokerage firm Berenberg Capital Markets said that the battle may have just begun.

“The exchanges, led by blockchain, will likely take their fight to the courts while hoping that the political winds change in the U.S. such that more crypto-friendly leaders would be in charge,” Palmer noted.