Enforcement Actions: US Crypto Activities May Cease Soon – Chainalysis Official
With the crypto ecosystem in the United States facing intense regulatory scrutiny from the Securities and Exchange Commission (SEC), experts believe that the industry is facing existential challenges. An executive at the blockchain data platform, Chainalysis has likened the regulator’s ongoing crackdown on the crypto industry to an informal ban on the sector.
A Threat To The Crypto Industry
According to the Vice President and Policy Head at Chainalysis, Caroline Malcolm, the digital asset landscape in the United States is under severe threat. The executive added that the current approach by the SEC in regulating the sector would lead to what she coined “ban by enforcement.”
In line with Malcolm’s view, crypto firms are willing to comply with regulatory policies. However, they face the challenge of navigating a regulatory landscape that lacks clear guidelines tailored explicitly toward the unique aspects of this fast-evolving industry.
As a result, the executive stressed that the enforcement-driven approach to regulation has further resulted in uncertainties instead of providing the much-needed clarity that could ensure user protection and investment opportunities. Furthermore, Malcolm emphasized that data from Chainalysis indicates a growing number of consumers entering the crypto market daily.
However, the current regulatory approach by enforcement comes with the unintended consequence of pushing crypto businesses to seek opportunities in foreign jurisdictions. According to Malcolm, the regulator’s moves significantly impact US crypto users as it restricts their choices within the market while also posing the risk of pushing such innovative technology beyond the borders of US jurisdiction.
She noted that it has become crucial to establish a comprehensive regulatory framework that can sustainably address these challenges to ensure consumer protection.
Are Crypto Businesses Leaving the US?
As the SEC intensifies its crackdown on digital asset businesses, industry executives have sounded the alarm, warning that such regulatory pressure is driving innovation away from the US.
Brad Garlinghouse, the Chief Executive Officer of Ripple, remarked in March that there is a mass exodus of blockchain technology firms from the country. He noted that their movement signifies the consequences of stifling regulatory policies.
According to him, these companies seek more friendly environments abroad to develop remarkable innovations. Moreover, the latest trend of blockchain firms migrating away from the United States has raised concerns among industry leaders who believe the country risks losing its competitive edge.
In April 2023, Tyler Winklevoss, co-founder of Gemini, expressed his concern that the US is lagging in crypto innovation. He referenced the European Union Parliament’s recent approval of the Markets in Crypto-Assets (MiCA) bill as evidence of Europe’s progress.
Likewise, Brian Armstrong, the CEO of Coinbase, also voiced his opinion that the United States is bound to lose its spot as one of the top crypto asset hubs globally if there are no changes to the current trend.
Meanwhile, industry analysts fear crypto-related activities will soon cease in the United States. For instance, top crypto platforms like Coinbase have shifted their focus towards international expansion, as demonstrated by the launch of a global derivative trading platform in May.
However, the services are unavailable to US customers. Similarly, Crypto.com announced its decision to halt certain operations in the United States last month.
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