SEC’s Recent Claims May Force Crypto Innovations Out Of America: Reports
The United States Securities and Exchange Commission has been exceptionally active of late. Recently, the agency went after the two world-largest cryptocurrency exchanges, Binance and Coinbase, levying severe allegations against them.
The stringent actions of the regulator have sparked numerous reactions and speculative from experts in the crypto industry. Some claimed that the recent lawsuit against Binance and Coinbase could be good for the industry as the two defendants demanded crypto rules clarity from the plaintiff.
However, the defendant’s claims have always been met with a stern rebuff as the prosecutor always claims their demands take years to fulfill. Consequently, many experts suggested that if the regulation pressure on crypto firms continues, SEC will drive them out of America.
Fireblocks’ Chief Legal Officer, Jason Allegrante, stated recently that the regulatory pressures emanating from SEC could make innovations take their business to territories outside the United States. He continued that it is incredibly easier for crypto firms as they don’t have to move factories.
Coinbase To Explore Offshore Markets
Meanwhile, many giant crypto firms are already testing foreign waters, receiving licenses to operate outside the US. For instance, Coinbase, the largest crypto exchange based in the US, recently obtained a license to offer crypto services in Bermuda.
Furthermore, the exchange is reportedly striving to cooperate with the regulators in Canada. It signed a pre-Registration document stating it would operate under the regulated Canadian market with total compliance, as the country plans to enforce a stricter crypto regulatory framework.
The CEO of Censo Inc. suggested that even though the US market is the largest crypto market, many businesses will still migrate from it soon. He added that investors in the crypto industry take much interest in the future size of the market in the future rather than what it is now.
And with the current restrictions from authorities, the future looks bleak for the American crypto market if nothing is done to salvage the situation. In addition, the V.P. at MaskEX exchange, Ben Caselin, stated that many crypto startups now focus on other jurisdictions.
Ben continued that it is good as the giants in the industry, like Coinbase and Binance, are engaging and demanding more precise regulations from the regulators. However, he admitted that this is the wrong time for smaller crypto firms to operate in America; they would do better elsewhere.
The SEC Is Not Bothered By The Situation
Commenting on the situation, the Chairman of SEC, Gary Gansler, said he is not bothered that firms are leaving the American market. He reportedly claimed that the US dollar is enough digital currency for the country, with no need for more.
Allegrante, Fireblocks’ CLO, suggested that even though many firms like Coinbase are more profitable in the US market, that’s not enough for them to engage all their efforts there. Hence they create branches outside the country to shift their balance with time.
Meanwhile, a senior analyst at Oanda Exchange, Edward Moya, claimed that the US is too big for firms like Coinbase to ignore. He added that the US market is the favorite to deliver the next significant rounds of crypto adoption. Hence, firms wouldn’t want to miss that.
Furthermore, Mark Palmer of Berenberg Brokerage said the combat between regulators and crypto exchanges, as led by Coinbase, may just be starting. He, however, suggested that if more crypto-friendly leaders take control of the US governance soon, they will soothe the situation.
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