Crypto companies, including Coinbase and Ripple, are threatening to leave the US as the Securities and Exchange Commission (SEC) increases pressure on the industry to comply with securities laws. Executives are hoping that their threats will be taken seriously and that regulators will soften their hard line. Despite crypto watchers viewing these threats as bluffs, firms are attempting to rally support and send a message to US politicians that the country may miss out on a key technological innovation.
Coinbase CEO Brian Armstrong criticised the SEC’s hard line and claimed that Chair Gary Gensler had taken an “anti-crypto view.” Ripple CEO Brad Garlinghouse also criticised the SEC and signalled plans to move the company overseas. He stated that the US was “getting passed not just by a little bit but by a lot.”
The Question of Whether They Will Actually Leave is Unlikely
Although Coinbase and Ripple have made threats to leave the US, it is unlikely that they will do so. According to Larisa Yarovaya, associate professor of finance at Southampton University, the US is one of the largest markets for crypto, and firms are concerned that regulation will cause panic among crypto investors. Despite this, crypto bosses are playing up to officials’ concerns that the US has become shrouded in regulatory uncertainty while other jurisdictions charge forward with proposed regulatory frameworks for digital assets.
The EU is expected to bring in the first comprehensive set of regulations for digital assets, known as Markets in Crypto Assets (MiCA), sometime in 2024. “It’s really commendable that Europe was able to get that done so quickly,” said Hester Peirce, a commissioner at the SEC. Diego Ballo Ossio, a partner at law firm Clifford Chance, said that other jurisdictions, including the UK and EU, are changing their legislative frameworks to create clear regulatory regimes for exchanges.
Practicalities of Moving Companies Out of the US Would be Tough
The practicalities of moving these already large companies out of the US would be tough as they need people with families, mortgages, and preferences on where they live. Replacing them with local talent in the new place may be easier said than done. Crypto bosses are playing up to some officials’ concerns that the US has become shrouded in regulatory uncertainty while other jurisdictions, like the EU and UK, have charged forward with proposed regulatory frameworks for digital assets.
While the US crypto industry might currently be throwing out empty threats right now, there could be a real issue if regulators in America don’t move forward with thoughtful regulation.