Cryptocurrency firms are growing frustrated with the United States’ inefficient regulation of cryptocurrencies and have called on Congress to pass a bill that could help boost the industry. The companies, including investment banking firm Goldman Sachs Group Inc., told members of Congress their interests in selling cryptocurrency products would not be jeopardized if they did so while complying with regulations. Experts say this is an indicator that more U.S-based blockchain startups will likely move overseas because it is easier to transition when your host country has less strict laws for businesses than yours does
Key executives from six major cryptocurrency companies appeared before the House Financial Services Committee on Wednesday, claiming that shoehorning current standards does not work.
Representatives from Coinbase, Circle, FTX, Bitfury, Paxos, and Stellar heard questions for over five hours in order to educate legislators on the complexities of cryptocurrencies, ransomware, investor protections, and banking the unbanked.
Most importantly, the executives criticized current rules and how they are applied to digital currencies, claiming that a new regulatory framework is required.
Existing restrictions are incompatible with cryptocurrency.
According to Charles Cascarilla, the CEO of Paxos, shoehorning current banking rules onto crypto is not the way to handle the problem.
“The answer is not to cram digital asset activities into a regulatory framework established for older generations of financial assets,” says the author.
Similarly, Brian Brooks, CEO of Bitfury, a Bitcoin mining company, branded the current regulatory approach dishonest. He talked specifically about the enforcement of securities regulations and how, in any event, cryptocurrencies do not get the same treatment (as, say, registered stocks).
“Does it make sense to file enforcement proceedings alleging that some crypto assets are unregistered securities, but then deny such assets the ability to be registered and traded on a national securities exchange?”
Overall, the session’s main goal was to persuade Congress to enact new legislation that would take into consideration the distinctions between crypto-assets and conventional instruments, allowing the industry to be regulated more fairly.
They suggested that the crypto business, as well as financial innovation in the United States, would suffer if this did not happen.
Hoskinson explains the issue in depth.
Cardano and Tron were delisted by social trading platform eToro for its US consumers at the end of last month, citing “the shifting legal climate” as the cause.
In response, Cardano creator Charles Hoskinson expressed his views on how US rules are suffocating the cryptocurrency sector.
Hoskinson, like the executives at the House Financial Services committee on Wednesday, asked for a new regulatory framework for cryptocurrencies. He claimed authorities have failed to identify sufficient definitions, pointing out shortcomings in the current system.
“We need to transition to a regulatory structure with far clearer definitions of terms.” In the United States, we don’t have a strong definition of virtual asset service provider. We don’t have a clear concept of what a utility token is…”
As a result, implying that regulating a sector based on ill-defined words is insane.
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