Nikolas Sargeant
Crypto companies are urging the SEC and Washington to take their concerns seriously. The industry feels that regulators have taken a hard line. These players are making bold threats to leave the U.S. if the pressure continues to mount. The SEC is stepping up pressure on the industry to comply with regulations. It's a poker game between cryptocurrency companies and the SEC.
Crypto industry players want the SEC and Washington to take their concerns seriously. They believe regulators have taken a hard line on the industry and are hoping for a softer approach. Executives from firms such as Coinbase and Ripple have criticized the SEC and plan to move their business overseas. They hope to rally support and show U.S. politicians that the country could miss out on important technological advances in the industry.
Last week, Coinbase CEO Brian Armstrong criticized the SEC for its strict actions against certain crypto companies. He accused Chair Gary Gensler of having an "anti-crypto view" despite previously supporting the industry as an economics professor at the MIT Sloan School of Management. Armstrong referred to the SEC's actions as a "lone crusade."
In an interview with CNBC's Dan Murphy in Dubai, Armstrong believes that the SEC differs from others. He thinks that Gensler isn't trying to regulate the industry as much as limiting it. Gensler has created lawsuits, which Armstrong thinks is unhelpful for the industry in the U.S.
This week, Ripple CEO Brad Garlinghouse criticized the SEC. As Ripple announced its expansion into Dubai and was asked for his message to SEC Chair Gary Gensler, Garlinghouse replied sarcastically, "Who?" Garlinghouse mentioned that Ripple will have spent $200 million in legal fees fighting the SEC's lawsuit against it.
Garlinghouse said that “I find it as a company that started in the United States, and as somebody who is a U.S. citizen, it’s sad. I have sadness about this. The U.S. is getting passed not just by a little bit but by a lot,” he went on to say “The tough thing about this is you have a country that I think has put politics ahead of policy and that’s not a good decision if you’re trying to invest in the economy.”
According to the CEO of Ripple, the company will have spent $200 million on fighting the SEC lawsuit. Garlinghouse noted that virtual asset regulatory frameworks in Dubai and Europe are more favorable than in the United States. The Ripple CEO believes that the U.S. is stuck. He and other crypto bosses have threatened to leave the U.S. due to concerns that the SEC's crackdown is becoming too harsh. The SEC has taken strong enforcement actions against several companies, including Ripple, Coinbase, Kraken, and Paxos, accusing them of flouting securities laws.
The SEC believes that many market tokens may meet the securities criteria. This would mean they must meet much more stringent requirements for registration and disclosure. However, crypto firms disagree and argue that the assets they issue or list on their platforms should not be considered securities.
