Binance and Coinbase Face Legal Action for Operating Unregistered Exchanges
A lawsuit has been filed against Binance, the world’s largest cryptocurrency exchange, and Coinbase, the largest US-based cryptocurrency exchange. The lawsuit accuses them of operating as unregistered exchanges and offering unregistered securities, among other charges.
Sen. Hagerty Supports Crypto and Advocates for Clearer Regulations
Sen. Hagerty has become a prominent advocate for cryptocurrencies in the Senate. While he hasn’t introduced any bills this year, he has written public letters to key officials, urging for clearer regulations on digital assets.
During a Cato event, Hagerty emphasized the importance of taking an incremental approach to crypto legislation. He highlighted a concise two-page stablecoin bill he introduced in 2021 as an example. He criticized his colleagues for valuing legislation based on its length.
Hagerty also expressed concerns about the SEC’s “regulation by enforcement” approach and called for more oversight hearings involving SEC Chair Gary Gensler. He questioned Gensler’s criticism of the crypto industry, considering his previous experience teaching a blockchain course at MIT.
Furthermore, Hagerty voiced his worries about the widespread adoption of central bank digital currencies (CBDCs), cautioning that it could lead the US closer to China in terms of economic surveillance. He specifically mentioned Saule Omarova, President Biden’s nominee to the Office of the Comptroller of the Currency, who advocated for a government-led digital currency.
Crypto Veterans Advise Developers to Explore Other Markets before Returning to the US
In light of the regulatory challenges in the US, several crypto veterans have encouraged developers to focus on experimenting in other markets and consider returning to the US when the regulatory environment becomes more favorable.
Antonio Juliano, founder of decentralized exchange dYdX, suggested that serving US customers may not be worth the hassle or compromises for the next five to ten years. He advised innovating in overseas markets and finding product-market fit before returning with more leverage.
Regulatory ambiguity in the US has pushed crypto companies to explore clearer regulatory environments in countries such as the UK and Brazil. Coinbase, for example, has expanded its global virtual currency operations in Germany, Ireland, Italy, and the Netherlands. The company is also considering potential moves to the UK and Dubai.
Similarly, Binance is working towards regulation in the UK despite facing a ban from the UK regulator last year.
Hot Take
The crypto industry is grappling with regulatory challenges worldwide, and the US is no exception. While some senators, like Sen. Hagerty, are advocating for clearer regulations, others believe it may be more beneficial to focus on innovation in friendlier regulatory environments before returning to the US market. The regulatory ambiguity has prompted crypto companies to explore opportunities in other countries, potentially shaping the future landscape of the industry.
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