United

Galaxy

Impact

<p><strong>The crackdown on the crypto industry has left several crypto companies wondering whether they should stay in the U.S. or not.</strong></p>
<h2 style="text-align: center;" id="galaxy-digital-8217-s-plan-to-move-offshore">Galaxy Digital&#8217;s Plan to Move Offshore</h2>
<p>Crypto investment firm Galaxy Digital is <a href="https://decrypt.co/143850/mike-novogratz-galaxy-digital-looking-at-how-fast-we-can-move-people-offshore" target="_blank" rel="noopener">speeding up</a> its efforts to relocate its operations offshore due to a lack of progress in U.S. legislation. The CEO of Galaxy Digital, Mike Novogratz, revealed this at the Piper Sandler&#8217;s Global Exchange &amp; Fintech Conference. He expressed that the regulatory environment has made it challenging for institutional crypto businesses like theirs to operate in the U.S. Therefore, they are considering how quickly they can transition operations offshore. Novogratz mentioned that other companies, such as Bullish, are already following this approach, resulting in job losses, reduced tax revenue, and stifled innovation in the U.S.</p>
<h2 style="text-align: center;" id="stalemate-in-u-s-legislation">Stalemate in U.S. Legislation</h2>
<p>Novogratz attributed the U.S. regulators&#8217; aggressive stance on crypto to the collapse of FTX under the leadership of Sam Bankman-Fried, whom he described as a &#8220;sociopathic fraud.&#8221; Bankman-Fried&#8217;s proximity to regulators and lawmakers had a negative impact on the industry, leading Democrats to become apprehensive about crypto. Novogratz criticized the current legislative situation in the U.S. as a &#8220;legislative stalemate&#8221; that has prompted Galaxy Digital&#8217;s decision to offshore its operations.</p>
<blockquote class="twitter-tweet">
<p dir="ltr" lang="en">On this week&#8217;s lawsuits against Coinbase and Binance, &#8220;I do think we are having very blunt conversations about something that requires nuance,&#8221; Former SEC Chairman Jay Clayton <a href="https://twitter.com/hashtag/BloombergInvest?src=hash&amp;ref_src=twsrc%5Etfw">#BloombergInvest</a> <a href="https://twitter.com/carolmassar?ref_src=twsrc%5Etfw">@carolmassar</a> <a href="https://t.co/Enp2BXEiAZ">pic.twitter.com/Enp2BXEiAZ</a></p>
<p>— Bloomberg Live (@BloombergLive) <a href="https://twitter.com/BloombergLive/status/1666888875044659208?ref_src=twsrc%5Etfw">June 8, 2023</a></p></blockquote>
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<h2 style="text-align: center;" id="sec-8217-s-impact-on-web3-companies">SEC&#8217;s Impact on Web3 Companies</h2>
<p>The Securities and Exchange Commission&#8217;s <a href="https://walletinvestor.com/magazinadmin/binance-lawyers-accuse-sec-chair-gensler/" target="_blank" rel="noopener">enforcement actions</a> against Coinbase and Binance have raised concerns about the future of Web3 and cryptocurrency service providers in the United States.</p>
<blockquote class="twitter-tweet">
<p dir="ltr" lang="en">The sad thing about this CZ is firstly that you as a pioneer in crypto have to be subjected to this treatment! Secondly that if the US does not classify crypto as a virtual asset like most other countries that all crypto companies and exchanges will shortly be leaving the US.</p>
<p>— RK (@GhuruKey) <a href="https://twitter.com/GhuruKey/status/1665862328594620416?ref_src=twsrc%5Etfw">June 5, 2023</a></p></blockquote>
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<p>Sergej Kunz, co-founder of the decentralized finance protocol 1inch Network, expressed his belief that regulatory uncertainty in the U.S. could hinder the growth of Web3. He compared the situation to the sentiments expressed by Brian Armstrong, the CEO of Coinbase, stating that it is stifling innovation. Kunz also mentioned that he witnessed Coinbase exploring the possibility of establishing operations in the United Arab Emirates.</p>
<h2 style="text-align: center;" id="contrasting-regulatory-environments">Contrasting Regulatory Environments</h2>
<p>The lack of clarity in U.S. regulations stands in contrast to Europe&#8217;s efforts to establish solid regulatory standards for the cryptocurrency ecosystem through the Markets in Crypto-Assets (MiCA) regulations. Kunz highlighted the positive impact of MiCA and how it has benefited the wider Web3 ecosystem. He mentioned that countries like Switzerland and the UAE have adopted a helpful and open-minded approach towards DeFi regulations, whereas the U.S. lags behind in this regard.</p>
<blockquote class="twitter-tweet">
<p dir="ltr" lang="en">Crypto companies and large Exchanges are leaving the US because there is no regulations in the US ,while all other countries have that in place. Crypto and blockchain will be the biggest economic boost and US is so far behind under Gary Gensler. Best believe! <a href="https://twitter.com/GaryGensler?ref_src=twsrc%5Etfw">@GaryGensler</a> <a href="https://twitter.com/POTUS?ref_src=twsrc%5Etfw">@POTUS</a> <a href="https://t.co/zcsEhxYyWq">pic.twitter.com/zcsEhxYyWq</a></p>
<p>— XRP-Flare-United (@FarshadRouhani5) <a href="https://twitter.com/FarshadRouhani5/status/1643924407331454976?ref_src=twsrc%5Etfw">April 6, 2023</a></p></blockquote>
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<h2 style="text-align: center;" id="challenges-with-centralization-and-trust">Challenges with Centralization and Trust</h2>
<p>Kunz emphasized the risk involved in trusting centralized entities with users&#8217; funds and assets, citing the collapse of FTX as an example. He explained that decentralized finance offers more efficient settlement through smart contracts compared to centralized settlement systems. However, he acknowledged that regulators struggle to understand how smart contracts and blockchain settlements function. Companies like 1inch have been engaging with regulators in the Middle East to facilitate adjustments to regulatory frameworks for DeFi-related products and services.</p>
<h2 style="text-align: center;" id="summary">Summary</h2>
<p>Overall, the U.S. legislative stalemate and regulatory uncertainty are pushing crypto investment firms and Web3 companies to consider moving their operations offshore, while countries like Switzerland and the UAE are embracing a more supportive regulatory approach. The lack of clarity in U.S. regulations poses challenges for innovation and growth in the cryptocurrency industry.</p>

The Exodus Has Already Started, Crypto Companies Are Leaving the U.S.

목차

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