- The U.S. crypto regulatory landscape has grown increasingly difficult following FTX’s collapse.
- Coinbase CEO Brian Armstrong warns that the U.S. risks losing its crypto lead.
- Before FTX collapsed, its founder routinely rubbed shoulders with lawmakers and market regulators.
In the wake of the FTX collapse, there has been a lot of talk of a crypto exodus from the United States. While U.S. regulators appear to be cracking down on the crypto industry, other regions seem to be opening up.
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As the disparity in regulations between the U.S. and other regions widens, Coinbase Chief Executive Officer Brian Armstrong has warned that the U.S. risks losing its crypto lead because policymakers have not moved on from the FTX debacle.
U.S. Risks Crypto Lead
In a tweet on Monday, June 26, Armstrong asserted that the U.S. is throwing away its “early lead” partly because policymakers who felt embarrassed by Sam Bankman-Fried‘s perceived fraud wanted to appear tough on crypto.
While the U.S. appears to be still licking its wounds after the FTX collapse, the Coinbase chief asserted that other jurisdictions like the United Kingdom and the United Arab Emirates have “moved on.”
Armstrong argued that sensible regulations were the best salve to prevent future blowouts as opposed to the current approach of regulation by enforcement.
Sam Bankman-Fried’s FTX collapsed in November 2022 with billions of dollars in customer deposits unaccounted for to date. Before the collapse of his crypto exchange, the disgraced FTX founder was a frequent guest at Congress and a leading political donor. At the same time, records show that he met with former U.S. Securities and Exchange Commission Chair Gary Gensler.
Following FTX’s collapse, several lawmakers were unwilling to work on crypto regulations. Similarly, the SEC has ramped up crypto enforcement efforts, suing at least seven crypto exchanges, including Brian Armstrong’s Coinbase, in about six months.
Armstrong’s recent comments came in response to a Japan Times headline that suggested the U.S.’s crypto crackdown could benefit the Asian economic giant. Japan recently exempted cryptocurrency issuers from a 30% unrealized gains tax to promote the industry under Prime Minister Fumio Kishida’s crypto-friendly administration.
On the Flipside
- Coinbase’s Armstrong has asserted that the firm is not leaving the U.S. market.
- The House Financial Services Committee is set to hold a vote on a cryptocurrency bill in July.
Why This Matters
Armstrong’s latest statements highlight the growing fears of the crypto industry in the U.S. as more crypto businesses shutter operations and shift focus abroad.
Read this to learn more about the SEC’s case against Coinbase as the regulator ramps up enforcement actions:
SEC Condemns Coinbase Operating Structure in Lawsuit Spree
Binance opted to go on the offensive in its case with the SEC. Find out whether this decision was worth it, as the Judge has denied the exchange’s request:
Binance Offensive in SEC Case Falls Flat. Was It Worth the Effort?
