Cryptocurrency companies are frustrated by the U.S. government’s lack of clear rules for the industry and the Securities and Exchange Commission’s aggressive actions against digital currency companies, according to multiple executives who spoke to CNBC.
Unlike other countries, the United States has yet to come up with a comprehensive framework or set of regulations that would allow cryptocurrency and blockchain companies to operate without fear of being targeted by regulators.
Meanwhile, the U.S. SEC has stepped up enforcement action against companies since the collapse of cryptocurrency exchange FTX last year.
On Wednesday, the SEC sent a Wells notice to exchange Coinbase. warn the company Identified potential violations of U.S. securities laws. SEC too Improper or unregistered securities exposure It has prosecuted cryptocurrency founder Justin Sun and other celebrities who have endorsed his digital coin.
The SEC is currently in legal disputes with many companies. Other companies including Ripple, genesis and gemini.
A senior cryptocurrency executive told CNBC at the Paris Blockchain Week event that he requested anonymity due to the sensitive nature of the issue. “It’s very frustrating for a player who has been doing the right thing all his life.”
ConsenSys CEO and Ethereum co-founder Joe Lubin told CNBC on Thursday that he believes the ecosystem is “frustrating in general.”
“I think we continue to see the SEC play this game of punishing those who are still alive,” Blockchain President Nicholas Carey, com, told CNBC on Thursday.
Much of what the SEC has done involves applying existing regulations to the cryptocurrency industry. Decades after the Howie test — One of the key tests for determining whether something is a security.
Many in the cryptocurrency industry feel that this is not the right path.
“I think the regulatory regime is less successful is when you try to analyze crypto through a traditional financial lens. You ask yourself, ‘Is it a bit like a security? say. … No, neither of those. It’s cryptography.
The SEC was not immediately reached for comment when contacted by CNBC.
“Clarity”
CNBC attended Paris Blockchain Week, one of Europe’s most prominent cryptocurrency conferences, and spoke with a number of executives. One of his requests the executive made to U.S. regulators was that they needed clarification.
Silvio Micali, founder of blockchain company Algorand, told CNBC on Wednesday, “We want to make the regulations a little more clear.
Bitcoin got off to a strong start to the year with the cryptocurrency rising significantly.
Jakub Porzycki | Null Photo | Getty Images
But some have expressed sympathy for the SEC, suggesting that Watchdog is only working within existing rules and that it is up to the U.S. government to change them.
“What are they going to do? If all they give you is a hammer, the whole world looks like a nail,” said Lynch of Bittrex Global.
Blockchain.com’s Cary said the SEC is “trying to do their job to protect consumers.”
SEC view
SEC Chairman Gary Gensler has addressed many of these points. Opinion article he wrote for The Hill It suggests regulators are clarifying the rules this month.
“The argument that securities law lacks clarity is not persuasive,” Gensler said. “Instead of acknowledging that their platforms do not provide adequate investor protection, some crypto companies may send the message that the law is unclear.”
He gave examples where cryptocurrency companies fall under existing securities laws, such as when a company offers a loan product.
Gensler also said, “Cryptocurrency intermediaries are not exactly lined up to register with the SEC and comply with laws enacted by Congress.”
The SEC chairman said enforcement actions are “another tool” for rooting out “compliance violations” in the regulator’s toolbox.
US risks lag behind Europe
Management warns that the lack of clear regulation in the United States could cause it to fall behind other countries and jurisdictions.
“I think it is the duty of Congress to actually create a legal and regulatory framework that properly regulates crypto, because … crypto is here to stay,” Lynch said.
Governments around the world are considering ways to regulate cryptocurrencies. Places that look like Switzerland And Dubai is marketing itself as a crypto-friendly destination with favorable regulations.
Meanwhile, the European Union (EU) is set to introduce regulations for the cryptocurrency marketplace (MiCA) this year, designed to introduce several rules within and around digital currency companies.
Ripple President Monica Long said, “I think so,” when asked by CNBC if the U.S. risks falling behind other jurisdictions in the crypto economy.
“Europe is emerging as a leader when it comes to setting clear regulations and rules that allow crypto companies and traditional financial institutions to accept crypto,” Long said.
Referring to the MiCA, a law that requires the consent of all 27 countries that make up the EU, Ripple’s president said, “It would be amazing if the US had one government and they couldn’t act together. It is.”
