- Coinbase CEO, Brian Armstrong, has criticized SEC Chief Gary Gensler for causing “untold harm” to the US by regulating the digital asset space through enforcement instead of proactive collaboration, and has raised the possibility of moving the company outside the US unless the regulatory climate changes.
- The SEC’s recent charges against crypto exchange Kraken over its staking program has caused outrage in the crypto community, with many suggesting that the SEC’s approach is not helpful for crypto innovation in the US.
- Despite mounting criticisms, the SEC remains unrelenting in its war on crypto, with Gensler defending the crackdown on cryptocurrency markets and reiterating his belief that the agency has sufficient authority to deal with the industry.
Gensler causing the US to fall behind in crypto innovation
Gary Gensler, the Chief of the US Securities and Exchange Commission (SEC), is facing criticism for his agency’s crackdown on crypto platforms, with members of the crypto community lambasting him for causing the US to fall behind in crypto innovation. The criticism is in response to Gensler’s decision to regulate the digital asset space through enforcement rather than proactive collaboration between regulators and industry leaders. Coinbase CEO, Brian Armstrong, has said that the SEC’s policy of regulation by enforcement has caused “untold harm” to the US, and has raised the prospect of relocating the company outside the US unless the regulatory climate changes.
2/2— Adam Cochran (adamscochran.eth) (@adamscochran) February 9, 2023
Gensler is not a regulator. He is an agent of an anti-crypto agenda, who only aims to wield his power as cudgel for those he doesn't agree with.
So the big question then, is why didn't FTX get this treatment?
Whose pocket is he in?
SEC’s regulation by enforcement
Coinbase’s criticism of the SEC’s enforcement-based approach to crypto regulation is echoed by many others in the crypto community, who suggest that it is not helpful for crypto innovation in the US. The SEC’s recent charges against crypto exchange Kraken over its staking program has caused outrage in the crypto community, with many suggesting that the SEC’s approach is heavy-handed and lacking in clarity. However, despite mounting criticisms, the SEC remains unrelenting in its war on crypto, with Gensler defending the crackdown on cryptocurrency markets and reiterating his belief that the agency has sufficient authority to deal with the industry.
The following statement is attributed to @KMSmithDC in response to today's settlement between the SEC and Kraken:https://t.co/32KysvKfz0 pic.twitter.com/8vkWZXB6a2— Blockchain Association (@BlockchainAssn) February 9, 2023
Impact of SEC’s actions on crypto companies
The SEC’s actions are having a significant impact on crypto companies operating in the US, with Coinbase warning that it may relocate the company outside the US unless the regulatory climate changes. Other crypto companies, such as Bittrex, have already decided to leave the US due to the current regulatory and economic environment. The lack of regulatory clarity and conflicting statements from the SEC and Commodity Futures Trading Commission (CFTC) are making it difficult for crypto companies to operate in the US, which is potentially causing the country to fall behind in the crypto race.
Is the United States falling behind in crypto innovation?
Despite the criticisms, the SEC and Chairman Gensler are continuing their crackdown on crypto, which has led to concerns that the United States may be falling behind other countries in terms of crypto innovation. Coinbase CEO Brian Armstrong, who has been critical of the SEC’s regulatory policies, warned that unless there is greater regulatory clarity in the US, his company may have to consider relocating elsewhere. He also noted that the US has the potential to be an important market for crypto, but the lack of regulatory clarity is causing untold harm to the country.
Armstrong’s comments come as rival exchange Bittrex announced its intention to exit the US, citing “the current US regulatory and economic environment.” Armstrong compared the regulatory environment in the UK, where there is only one regulator responsible for both commodities and securities, with the US, where there are separate bodies. He argued that the contradictory statements from the heads of the CFTC and SEC, and the lack of regulatory clarity, make it difficult for businesses to operate in the US.
You could have:— RYAN SΞAN ALTCOIN – rsa.eth 🏴🦇🔊 (@RyanSAdams) February 9, 2023
– Mandated proof-of-reserves
– Required staking transparency
– Supported decentralized staking
Instead, we just got another gary g. ban hammer to the head. And we have no confidence you won't come for decentralized staking next.
You're driving it all offshore.
Coinbase has also been critical of the SEC’s charges against crypto exchange Kraken over its staking program. Members of the crypto community are outraged over the charges, which they believe show that the SEC is not working with industry players to forge appropriate legislation. The SEC’s charge towards enforcing action against staking service providers has prompted Armstrong to say that “regulation by enforcement” would be a “terrible path” for US innovators, as they’ll be forced to push more of their services offshore.
"Not your keys … " – @GaryGensler. The @SECGov understands the importance of self-custody. https://t.co/oxPkFeJ77k— Michael Saylor⚡️ (@saylor) February 9, 2023
Despite these concerns, it’s worth noting that the US remains a leader in crypto innovation. The country is home to some of the largest and most influential crypto companies, and it has a thriving ecosystem of startups and investors. However, the lack of regulatory clarity and the SEC’s aggressive enforcement policies are creating uncertainty in the market, which could ultimately lead to businesses moving offshore.
In conclusion, while the US is not necessarily falling behind in crypto innovation, the lack of regulatory clarity and the SEC’s crackdown on crypto are creating uncertainty in the market. This is leading to concerns among industry players that the US could lose its status as a global leader in crypto, and it’s up to regulators to provide more clarity and guidance to help the industry grow and thrive.
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