SEC driving US companies
2 min readThe crypto industry is currently in a difficult position in the USA. In the past few months, the regulators have tightened the tone towards the industry. On the front line: the SEC. The authority initiated a series of measures against various crypto companies in the United States, including heavyweights such as Kraken, Paxos, Gemini and Coinbase. The accusation is always the same: trading in unregistered securities.
For Susan Friedman, the US offensive could have a serious impact on the domestic crypto industry. The Head of Global Policy at Ripple prophesied on Twitter a relocation of the company’s activities abroad. The consequences of the “US failure” to define clear rules for the sector would ultimately result in the monitoring of illegal activities being restricted.
Ripple Labs, the development studio behind the cryptocurrency XRP, has itself been in litigation with the SEC since December 2020. Here, too, the accusation is: trading in unregistered securities. To a certain extent, the process marked the starting signal for further conflicts between US regulators and crypto companies in the USA.
Coinbase and Gemini before the jump?
One of the trouble spots right now: Coinbase. The US giant is preparing for a legal battle with the SEC, according to CEO Brian Armstrong. The regulator had previously threatened a lawsuit against the trading venue by means of a “Wells Notice”. Coinbase responded by announcing the opening of an offshore stock exchange in Bermuda. The company has already received a corresponding license from the responsible authorities.
Something similar can also be observed with Gemini. The Winklevoss twins’ crypto exchange also announced the opening of a location in India last week. The trading place is primarily concerned with retaining young tech talents in the company, who are supposed to further develop the products of the platform. An expansion to the trading business is likely to follow soon.
Circle CEO Jeremy Allaire warned of a “flight of crypto companies from the US” at the end of March. The USDC issuer made a move out of the US back then when the stablecoin provider opened a new headquarters in Paris. Reason for the advance: the markets in crypto assets (short: MiCA). The regulation lures companies with uniform crypto rules into the EU area.
SEC chief Gary Gensler under pressure
Meanwhile, SEC boss Gary Gensler is now under pressure himself. The 65-year-old recently had to answer to the Finance Committee of the US House of Representatives for his push against the crypto industry. The Republicans in particular cross-examined Gensler. One of the deputies even openly flirted with the dismissal of the SEC boss.
