From: allin
The United States is currently facing significant challenges regarding cryptocurrency regulation, with implications for innovation and the industry’s future within the country [01:23:06].
Current Regulatory Stance
The U.S. authorities have “firmly pointed their guns at crypto” [01:21:54]. The prevailing sentiment is that crypto is effectively “dead in America” [01:21:41], and that the country is “banning crypto” [01:23:02]. This approach is seen as potentially driving companies overseas, which would be “terrible for American innovation” [01:23:06].
Key Regulatory Actions
- SEC Wells Notice to Coinbase: The SEC sent a Wells notice to Brian Armstrong, the CEO of Coinbase [01:21:27]. Coinbase is considered the “gold standard” for operating correctly within the crypto space [01:22:51], and has repeatedly requested a regulatory framework [01:22:57].
- Blame for Banking Crisis: Gary Gensler, the SEC Chair, has blamed the banking crisis on crypto [01:21:48].
- Motivation for Crackdown: The crackdown is perceived to be due to crypto being “most threatening to the establishment” [01:22:10] and having “pushed the boundaries more than any other sector of the startup economy” [01:22:16]. It is also suggested that the crackdown is not a coincidence, occurring at the same time as concerns about de-dollarization [01:22:40].
Industry Response and Outlook
Brian Armstrong is “considering relocating out of the U.S. if the regulatory clarity does not improve” [01:21:36]. The current climate is seen as a “bill has come due” for the crypto industry [01:22:24].
A contrasting point highlighted is that FDX, which was characterized as “the most fraudulent,” was the entity that came closest to obtaining a license, rather than compliant entities like Coinbase [01:23:43]. This is attributed to figures like Sam Bankman-Fried possessing “skills in gaming the system” [01:23:49] by making large donations and understanding how to “play the game” [01:24:00].
The discussion also touched upon the concept of industries regulating themselves, with the analogy of the tobacco industry used as a cautionary tale where self-regulation failed to prevent harm [01:24:53]. It’s argued that for areas impacting everyone, regardless of participation, there are “not many good examples of separate allegations” [01:25:31] of successful self-regulation. Had the crypto industry been more “thoughtful about which tokens [and] NFT projects” to support, they might have avoided some of the current challenges [01:25:51].