The prediction has two key parts: (1) U.S. regulation would effectively ban most significant crypto activity and (2) this would drive a substantial share of major crypto companies and new startups to move their primary operations overseas by around 2026. As of late 2025, both are contradicted by observable facts.

1. No effective ban on most significant crypto activity

   • The SEC approved 11 spot Bitcoin ETFs in January 2024, integrating bitcoin exposure into mainstream U.S. capital markets rather than banning it. (apnews.com)
   • In September 2025, the SEC adopted generic listing standards that make it easier to launch a wide range of crypto ETFs (including multi-asset products), indicating increasing formalization, not prohibition. (investopedia.com)
   • Banking regulators that had previously issued very cautious crypto guidance under Biden reversed course in 2025: the OCC and FDIC both rescinded prior restrictive guidance and explicitly allowed banks to engage in crypto custody, stablecoin activities, and other digital-asset services, subject to risk management. (reuters.com)
   • Major U.S. exchanges like Coinbase, Kraken, and Gemini continue to operate large U.S. businesses. While there were enforcement actions (e.g., Kraken’s forced shutdown of U.S. staking in 2023; SEC lawsuits against Binance and Coinbase), these targeted specific products/legal theories rather than banning trading, custody, development, or mining broadly. (sec.gov)
   • By 2024–2025, the regulatory trend is loosening, not tightening: the SEC has been dropping or settling several high‑profile enforcement actions against major exchanges under a more crypto‑friendly administration. (theverge.com)
     Taken together, U.S. policy created friction and uncertainty, but the presence of regulated ETFs, active exchanges, public crypto companies, and newly relaxed banking rules is incompatible with an “effective ban on most significant crypto activity.”

2. No clear evidence of a mass relocation of primary operations overseas

   • Several U.S. firms did expand abroad or choose foreign hubs for regional operations — for example, Coinbase picking Ireland (later Luxembourg) as its MiCA hub for the EU, explicitly to grow outside the U.S. amid regulatory pressure at home. (cnbc.com)
   • Venture firm a16z opened a London crypto office in 2023 citing a more predictable regime than the U.S., but then closed that London office in 2025 and refocused on the U.S. market after the political/regulatory environment shifted. (cointelegraph.com)
   • Major issuers like Circle and major exchanges like Coinbase and Gemini remain U.S. companies: Circle lists extensive U.S. state licenses and executed a NYSE IPO in 2025; Coinbase is a large S&P 500‑component U.S. exchange; Gemini completed a Nasdaq IPO in 2025. None of these have shifted their primary corporate identity away from the U.S. (en.wikipedia.org)
   • Developer data show the U.S. share of global crypto developers has declined materially since 2018, but the U.S. is still the single largest country for crypto developers (roughly ~19–26% depending on the year), indicating erosion of leadership but not a wholesale exodus of primary activity. (developerreport.com)
     There is some movement of talent and some product lines overseas, but the evidence does not support that a substantial share of major crypto companies or the bulk of new startups have relocated their primary operations abroad. Instead, U.S. firms have adopted a multi‑jurisdictional strategy while keeping core corporate structures and large teams in the United States.

Because (a) U.S. regulation has not amounted to an effective ban on most significant crypto activity, and (b) there has been no clear, large‑scale relocation of primary operations for a substantial share of major firms and startups, the prediction should be rated wrong.