- The crypto industry gets stuck between regulatory unclarity and punishment for not complying.
- Many believe unclear crypto regulations will make the US lag behind other countries.
Cryptocurrencies are now a household name, and the ones living under the rock are unaware of them. The asset class has grown rapidly in the past few years, gaining a significant user base as an N number of companies run over it. Such an enormous ecosystem undeniably calls for regulations to avoid future mishaps, as the community demands so alongside.
The United States is leading in terms of crypto users and companies worldwide. Though the burgeoning asset class has seen much of its success in the region, it is strangling due to the absence of clear crypto regulation. Top executives of many crypto companies have registered their frustration over the issue.
In addition to the lack of rules, the aggressive take of SEC-like financial regulators against crypto companies is also a major concern. CNBC approached numerous company executives at the prominent European crypto conference, Paris Blockchain Week. The whole conversation jotted down to one request for regulatory clarity over crypto in the US.
According to CNBC, the country has not developed a comprehensive regulatory framework for crypto. This could have made companies working in cryptocurrencies and blockchain eliminates the fear of unlawful doings. The indication was towards the Securities and Exchange Commission, which recently tightened its scrutiny over crypto and took enforcement actions.
Crypto Executives Find Lack of Enforcement Frustrating
Blockchain.com President Nicolas Cary said that the SEC will likely play the game of punishing people in space. He said it will continue to be seen, and it’s “a frustrating thing to observe.”
Another crypto executive, whose identity was not disclosed, stated that the action feels “uncollaborative” and frustrating even for those doing it the right way. CEO of MetaMask creator firm ConsenSys, Joe Lubin, also iterated similar thoughts of the ecosystem being “generally frustrated.”
In the past, enforcement actions taken by the SEC were majorly seen in accordance with the Howey Test. Industry experts think crypto could not be treated like the traditional contracts that went through the test since it was created years before the crypto assets.
Bittrex Global CEO, Oliver Linch, said that analyzing cryptocurrencies from a perception similar to traditional finance makes it “less successful regulatory regimes.” He says crypto is not like security or a commodity, it’s just crypto.
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