The SEC’s Firm Declaration: America’s Financial Decline

The SEC affirmed America’s financial decline, putting its once-dominant position under scrutiny in the global financial arena. A new paradigm emerges from the SEC’s announcement. America’s economic dominance isn’t guaranteed, so stakeholders need to rethink their plans.

SEC’s Actions Create Opportunity for Hong Kong and Singapore as Crypto Hubs

Krayon Digital’s Hamilton Keats talks about how the SEC’s actions against Coinbase and Binance have created opportunities for Hong Kong and Singapore. Cryptocurrency companies want more welcoming environments so that these cities can attract them.

Two major lawsuits were filed against Binance and Coinbase by the US Securities and Exchange Commission (SEC) during the same week. In the meantime, Circle, another prominent company, got a Major Payment Institution license in Singapore.

In Asia and the U.S., major crypto companies are treated differently. The U.S. regulator’s stance on cryptocurrencies inadvertently creates an opportunity for Asia to lead the way.

Instead of publishing a clear rule book, the SEC has taken a regulation-by-enforcement approach that is harming America, 

Coinbase’s founder and CEO Brian Armstrong said.

The SEC took legal action against Coinbase and Binance.US for allegedly operating as unregistered brokers. Even though Binance is regulated, Coinbase’s lawsuit is surprising. Clearly, the SEC wants to take on the cryptocurrency industry head-on, signaling a new phase of crypto regulation.

The SEC approved Coinbase’s listing on the NYSE in April 2021 as part of its listing process. The SEC and the Commodity Futures Trading Commission have conflicting statements about what’s a security and a commodity. In addition, the U.S. hasn’t introduced legislation clarifying crypto regulation.

Coinbase got a Wells Notice from the SEC, suggesting they take enforcement action. Previously, the SEC had encouraged crypto businesses to register. As one of the biggest players in the U.S. digital asset industry, Coinbase follows regulatory compliance. According to Coinbase CEO Brian Armstrong, however, the SEC’s interaction with Coinbase has been challenging, as the exchange tried to register, but ran into obstacles.

SEC actions are pending against Coinbase and Binance. Binance risks a complete ban in the US, while Coinbase could get fined and its staking business shut down. Cryptocurrency’s future in the country will be greatly affected by the outcome of these cases, highlighting the need to revamp US securities laws.

SEC’s Regulation Hampers Crypto Progress, Boosts Asian Crypto Hubs

Regulation of cryptocurrencies by the SEC threatens progress and innovation, contradicting past support for groundbreaking technologies in other industries. Even if the United States lags behind in financial technology advancements, it’s on the right track. 

Ultimately, these cases will shape history, and the SEC’s actions might not be viewed positively. Blockchain technology has a lot of advantages for global financial systems.

Because this industry has built-in mechanisms to resist censorship, efforts to resist or stifle it are ineffective. The Chinese attempt to regulate cryptocurrencies failed. They’re using Hong Kong as a test ground to exert limited control.

Regulators can’t ban cryptocurrency by just shutting down the internet; that’s unrealistic and impractical. Cryptocurrencies are the way to go. The regulatory framework should simplify processes for compliant operators to protect consumers. 

Overregulation hampers innovation, like the Wright brothers and the FAA’s potential impact on commercial aviation. The SEC’s motives have raised questions, with some suggesting regulatory capture. Regulated frameworks allow for oversight, control, and innovation.

Asia is rapidly becoming the preferred destination for cryptocurrency companies, while the US lags behind. Many big players have already set up shops in Singapore, like Circle and Anchorage.

Hong Kong is also promoting cryptocurrency investments and blockchain technology adoption in the financial sector with legislation. The Hong Kong Monetary Authority also legalized crypto trading for retail investors. Franklin Templeton is exploring tokenizing real-world assets, something the Hong Kong Securities and Futures Commission wants traditional financial institutions to do.

In 2030, the Boston Consulting Group predicts that tokenizing traditional financial assets will be worth US$16 trillion. In the long run, the SEC might hurt the U.S. economy if it keeps its current approach.

Although many ambitious start-ups have chosen the United States as their base, there’s a good reason why many are now looking outside. As nearly all major players in the crypto industry are establishing hubs in Hong Kong and Singapore, it’s likely that more U.S. crypto companies will move offshore.

Read more: 

• Acting Comptroller of the Currency Sees Blockchain in America’s Financial Future