Will Crypto Survive The Full-Scale Regulatory Assault In The US
It’s no secret that the central banking system and the regulators operating at the top of these hierarchies are not cryptocurrency fans. However, it would be ridiculous to suggest that the industry shouldn’t be regulated in some capacity. Any regulation must be lucid enough for companies to understand clearly to continue innovating in the United States.
Given recent events and developments from the SEC, the likelihood of this is growing smaller by the day, with many innovative technology companies choosing to set up their base outside the United States. It seems like a seriously missed opportunity, and it might be one that the regulators look back on in 20 to 30 years and rue greatly.
How Regulation Should Work
Cryptocurrency isn’t going anywhere, and it simply pushes innovation abroad to countries like the United Arab Emirates, which has welcomed many American cryptocurrency companies already. Regulators in the United States have shown in the past that they can set in place a solid framework to properly regulate industries that have the potential to generate billions as a viable tax base.
The best example of how regulation can work effectively is in the casino industry. Before the 21st Century, only three States permitted gambling. It was thoroughly enforced, and other than Las Vegas, you couldn’t gamble in most other locations in the United States. Following a revamp of the regulation, games like poker are now available to play in many physical and online casinos in the United States. Having a completely unregulated poker gambling market is dangerous and counterproductive to the industry, but when you give operators a clear set of guidelines and rules, the best online poker real money casinos rise to the top and provide a high-quality service.
Healthy competition and proper regulation are about learning how to play poker and then implementing what you learn into online games against other players. Without adequate regulation of the casino industry, poker wouldn’t be able to grow into the colossal market it has become today. This is one example of a regulation working, and stifling an industry or stamping it out is not usually the ideal recourse, as we currently see with crypto in the US.
Suppose cryptocurrency regulation is correctly implemented with a clear framework and has created a flourishing sector that provides billions of dollars in tax, like the gambling sector. In that case, this is a win-win for all parties concerned. The SEC is taking a considerable gamble pushing such a bright and profitable sector abroad as it could see them lose out on a potential trillion-dollar industry over the next couple of decades, and the casino and gambling industry has shown that proper regulation is the most appropriate step forward.
Will The SEC Destroy American Crypto Innovation?
June saw the SEC ramp up their efforts to stifle the digital asset industry in the United States. However, it appears that Gary Gensler, the chair of the SEC, has completely overstepped his authority. It has since come to light that he applied for a job at the world’s biggest cryptocurrency exchange, Binance, in 2019. Four years later, he has accused the company of a raft of regulatory breaches, quite the U-turn.
Binance has no headquarters in the United States, and its US trading volume is relatively small, even though it’s the world’s biggest cryptocurrency exchange by volume. In addition, the complaint is civil, so for all of the fear-driven headlines, it’s a lot of smoke and mirrors from the chair of a regulatory body that seems hellbent on snapping the cryptocurrency sector apart by any means necessary, with no cohesion or structured argument.
In addition, Gensler has also aimed at American exchange Coinbase, which is a whole different story. Coinbase is a publicly traded company that had to get SEC approval before going public in April 2021. As Coinbase is a company with a multi-billion-dollar turnover, they will have no issue debunking some of the more bizarre accusations that Gensler has leveled at them, and a lot of people within the cryptocurrency space believe both matters will be resolved relatively quickly with a small fine.
The case against Ripple and XRP has been dragging on for two and a half years. Although it looks like it could come to a close soon, it’s done enough to dissuade many big technology inventors and innovators from looking overseas to build their modern-day digital empires.
Final Thoughts
Cryptocurrency will undoubtedly survive this uncoordinated and disjointed attack from Gary Gensler. The more pressing question for American traders is whether or not the industry will survive in America. Coinbase is a big name in the American cryptocurrency sector, and if they manage to outmaneuver the SEC, you’d imagine there’s further action planned somewhere down the line from Gensler.
The powers that be want to suffocate the American digital asset and blockchain industry as quickly as possible. By going after the two most significant exchanges in the industry and one of the most prominent projects, XRP, they have no real intention of regulating the sector and providing a blueprint that companies can work from to avoid regulatory action in the future.
Following the news regarding the regulatory action against Binance and Coinbase, Bitcoin and other cryptocurrencies went up around 5% in price in a show of global strength. However, this also signified that the American financial grip on global markets might not be near the force it used to be, which again means the regulatory assault will have even less impact.
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