Financial authorities in the US are putting penalties on the cryptocurrency sector, and business owners are threatening to move their operations abroad.
Since 2020, the Securities and Exchange Commission (SEC) has been tightening the noose around cryptocurrencies, but recent accusations against Binance and Coinbase have raised questions about whether some of them are just a substitute for dollars, yen, and euros, but rather securities that must be traded according to strict regulations.
The US Restrictions
Digital currency proponents contend that regulators are mired in the past and enforcing regulations that are inappropriate for digital currencies like Bitcoin or Ethereum.
Additionally, US regulatory officials are engaged in a turf war that is engulfing cryptocurrency enterprises. The sector has called for unambiguous regulation, but Washington’s political deadlock has stalled progress on that front.
- SEC tightens regulations on cryptocurrencies, questioning Binance and Coinbase’s legitimacy.
- Proponents argue regulators override outdated regulations for digital currencies.
- US crackdown disrupts blockchain ecosystem, removing intermediaries.
The creation of an office in London by American private equity behemoth Andreessen Horowitz to invest in cryptocurrency ventures was welcomed by British Prime Minister Rishi Sunak. Political leaders from several nations are eager to take advantage of the potential.
The US crackdown has caused uncertainty in the ecosystem that supports cryptocurrencies and the blockchain concept at its foundation, which eliminates intermediaries like governments and banks from transactions.
Realio founder and cryptocurrency investor Derek Boirun wrote a blog titled “Why I’m Leaving the US” on Medium in which he claimed that he had wasted time and money trying to cooperate with US regulators.
The White House’s perspective, which published a study in March doubting the utility of cryptocurrencies, is another factor contributing to the unfavorable environment for cryptocurrencies. Cryptocurrencies were deemed by the White House to be “too risky” and ineffective replacements for fiat money.