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CoinJar is moving its headquarters to the UK to take advantage of a more favourable regulatory regime.
Australian bitcoin startup CoinJarannounced yesterday, December 1st, 2014, that it had relocated its headquarters to London’s Docklands region as it enters the next stage of its growth strategy by integrating as a UK company.
“We’re excited to be part of the progressive digital currency scene in London, and we know we can play an important role in this market,” said Asher Tan, CoinJar CEO and Co-founder.
“We spent some time in California, in the Silicon Valley tech scene. While it is still the Mecca for startups and tech, in terms of financial technology, the UK is on a par. And at the same time, the UK has been more open to investigating these new technologies,” he said.
More than 32,000 Australians use Coinjar. The platform has handled more than $50 million worth of transactions, although the company said that Australian users will benefit from its move, due to access to global markets.
According to Tan, CoinJar customers will no longer get knocked with Australia’s 10 percent Goods and Services Tax (GST) when buying or selling bitcoin, under the country’s current tax treatment of virtual currencies.
“My co-founder and I felt the UK was most welcoming for our business,” Tan told. “The legislation has been one of the factors — there have been no added levies, such as VAT to bitcoin in the UK — but from really early on, we knew if we wanted to make a global product, we couldn’t just service Australian users. We wanted to be competitive globally.” he added.
Looking back, Australian-founded tech giant Atlassian relocated its corporate headquarters to the UK earlier this year for better tax treatment and to facilitate its expansion prospects.
CoinJar is leaving some of its staff members in Melbourne, while the company’s headquarters settles into its new home at financial technology accelerator Level 39, in London’s Canary Wharf.
“We maintain a strong Australian presence, based out of Melbourne, and will continue focusing on the things that have defined us such as facilitating meetup groups, sharing knowledge and highlighting our amazing customers.”
Asher Tan said that the move will see CoinJar begin hiring new figures in the UK, including top developers, to grow its European operation with the launch of a new platform early next year, while the company expects to continue fully serving its existing customer base.
New European customers will productively be on the same platform as its existing customers, though there will be different connections to various banking networks, depending on the customers’ local markets.
“We’re limited by what sort of banking and financial framework there is in a market,” he said. “We hope to launch a new platform early next year, which will be for UK customers as well as existing customers in Australia.”
The move reflects the first of several hearings of an inquiry by the Australian Senate Economics References Committee into an appropriate plan for digital currencies.
The Senate Committee was told on November 26 that the Australian Taxation Office decision to treat bitcoin and other digital currencies as a commodity for tax purposes is likely to hold up the emerging cryptocurrency sector and force businesses overseas.
“It could result in driving the digital currency businesses that emerging in the sector offshore and potentially underground,” said Ronald Tucker, the chairman of the ADCCA (Australian Digital Currency Commerce Association).
In August, the Australian Taxation Office released its instruction on digital currencies, treating them as barter for individuals transacting less than AU$10,000 worth, but as a commodity for anything over that amount, or for businesses.
The decision leaves businesses and high-value bitcoin transactions open to the GST for both buyers and sellers, while individuals using bitcoin as an investment may be subject to capital gains tax rules when they dispose of it, as they will for share assets.
At present, Her Majesty’s Revenue and Customs in the UK excuses digital currency trading from value added tax (VAT), meaning that new and existing CoinJar customers will not be charged any additional taxes when they trade.
Asher Tan stated: “The UK has a very sensible approach to the regulation of new technologies like Bitcoin. There is recognition of its potential within government and regulatory bodies, who are formulating policies to encourage fintech businesses to situate themselves in the UK.”
“Everything is happening right now, but we need to take a proactive step,” he said. “We are competing on a global scale, there are well-funded American startups and UK companies. To be a global leader in this space, we’re not going to sit back; we’re taking a lead on this,” he concluded.