The current regulatory crackdown in the United States is heavily affecting companies in the cryptocurrency industry. Crypto companies are analysing the possibility to move to other jurisdictions to search for better legal and regulatory frameworks. The current uncertainty in the regulatory landscape has affected companies and their ability to operate in this environment. Two of the companies affected include Binance and Ripple.
Crypto Firms in the US Search for New Jurisdictions
A better and clearer regulatory landscape could help crypto companies expand their services and products. In a recent report released by CoinDesk, they discuss the current legal and regulatory landscapes and how this is affecting Bitcoin (BTC) and crypto-related companies.
For example, U.S. Senator Cynthia Lummis said that there has been a failure of the United States to enact policy. This has created a situation in which companies search for better jurisdictions to settle their operations and start to build new business plans.
About it, she said:
“The failure of the United States Congress to enact policy is pushing the industry to other countries. Europe is ahead of us in terms of its regulatory framework. Australia and the U.K. are getting ahead of us. Switzerland is far ahead of us.”
Just yesterday, we reported at UseTheBitcoin that Binance and its CEO Changpeng Zhao have been accused by the U.S. Commodity Futures Trading Commission (CFTC) of breaching trading regulations in the country. This is just one of the many examples out there related to how the United States and its regulations are pushing companies out of the country.
Another important thing is linked to the case that has been opened by the U.S. Securities and Exchange Commission (SEC) against Ripple due to the XRP virtual currency. The U.S. SEC accused Ripple of selling an unregistered security. Back in 2018, 2019 and 2020, Ripple did extensive work in order to offer better solutions to banks that wanted to send and receive funds across borders.
Since 2020, Ripple has been trying to deal with these accusations and has experienced multiple legal debates. These two cases of Ripple and Binance are just some of the clearest examples of how not-clear regulations are affecting the crypto industry to expand and offer unique services to clients, both institutional and individuals from different countries.
Significant Challenges Ahead
There are many different challenges for crypto companies operating in the United States. With the current and growing uncertainty in the country, there will be more issues affecting firms that want to deal with virtual currencies or clients. Many companies are not able to plan for the future or create new and innovative services.
It is also worth taking into consideration that due to the legal and jurisdictional arrangements of the United States, there are no uniform rules that could apply to the whole country. With a multiplicity of regulatory bodies, different interpretations and legal arrangements, there will only be more struggles and issues for the crypto industry as a whole.
Other countries such as Malta, Singapore, and Switzerland or Malta are already creating the necessary rules for crypto companies to operate and expand their businesses. The legal frameworks that they have implemented are very attractive for crypto companies, which is pushing adoption even further.
Another thing that has been reported in recent years is related to the lack of support from traditional financial companies to crypto firms. It became very difficult for companies and even individuals to get access to digital currencies. Many banks do not allow transfers to crypto exchanges while others would block transactions to crypto-linked companies.
These issues are all related to a cryptocurrency environment in the United States that is affected by a lack of clear regulations or a wrong interpretation of how cryptocurrencies such as Bitcoin work. Additionally, this is only harming the country in becoming a leader in terms of crypto services for the whole world.
It would be very important to see what will happen in the future. It is also highly possible that other companies will be shut down and that many others will leave the country to search for better conditions to work in and settle their operations.