SEC is killing innovation in the United States — 1inch co-founder

Share This Post

U.S.-based Web3 companies and cryptocurrency exchanges could be pushed offshore following enforcement actions against Coinbase and Binance.US.

The United States could risk an exodus of major Web3 and cryptocurrency service providers as the Securities and Exchange Commission (SEC) takes action against Coinbase and Binance.

Sergej Kunz, a co-founder of decentralized finance (DeFi) protocol 1inch Network, believes the SEC’s enforcement action against the two centralized exchanges could have a negative effect on the growth of Web3 in the United States.

Related: SEC lawsuits against Binance and Coinbase unify the crypto industry

Speaking to Cointelegraph during Money 20/20 in Amsterdam — a popular global fintech event focused on payments and financial service providers — Kunz highlighted his belief that regulatory uncertainty in the U.S. could hurt the industry:

“I would say the same as Brian Armstrong. It’s killing innovation in the United States. All the companies there are thinking of moving to another country.”

Kunz added that he had witnessed Coinbase’s CEO holding talks with United Arab Emirates delegates earlier this year, exploring the possibility of setting up shop in the Middle East. Within a few weeks, news broke that Coinbase is indeed looking to establish a base of operations in the UAE.

Events in the U.S. this week are in stark contrast to the experience at Money 20/20, where a plethora of household names in traditional finance, or TradFi, were interspersed with a handful of companies and service providers from the cryptocurrency and DeFi ecosystem, including Ripple and USD Coin (USDC) issuer Circle.

Cointelegraph’s Gareth Jenkinson alongside 1inch Network co-founder Sergej Kunz at Money 20/20 in Amsterdam. Source: Cointelegraph

1inch Network, which has established itself as a notable DeFi aggregation protocol, also had a booth near the main entrance to the event. The company’s presence among so many TradFi players seems indicative of the latter’s growing interest in Web3.

Europe’s move to create solid regulatory standards for the cryptocurrency ecosystem through the Markets in Crypto-Assets (MiCA) regulations contrasts the lack of clarity across the Atlantic in the U.S., where Web3 firms and proponents continue to plead for a regulatory framework.

Related: 3 takeaways from the European Union’s MiCA regulation

Kunz said that while MiCA pertains more specifically to centralized exchanges, efforts to create frameworks for businesses to offer products and services across the continent have been positive for the wider Web3 ecosystem.

He also revealed that countries like Switzerland and the UAE have adopted an open-minded “how can we help” approach, putting them far ahead of the U.S. when it comes to DeFi regulations:

“They say, ‘How can we help you?’ If you have something that adds value, we can change the framework.”

Kunz said a major stumbling block for regulators is understanding how smart contracts and settlements work on blockchain systems. Players like 1inch have been communicating with regulators in the Middle East to adjust regulatory frameworks about DeFi-related products and services.

“When I do a keynote I try to explain what is DeFi and Web3? How the settlement on smart contracts is more efficient than centralized settlement.”

Kunz added that events like the collapse of FTX are indicative of the risk of trusting a centralized party to hold their money or assets. 

Magazine: Crypto regulation: Does SEC Chair Gary Gensler have the final say?

Read Entire Article
spot_img

Related Posts

Bitcoin Mega Whales Are Buying, Time For Rally To Return?

On-chain data shows that the largest number of investors in the Bitcoin market are finally buying, which could be bullish for the asset’s value Bitcoin Mega Whales Have Shown Net Inflows In The

Binance CEO Vows Cooperation With Nigerian Authorities In $35M Money Laundering Case

In a recent development, Richard Teng, the CEO of Binance, has confirmed the company’s close cooperation with Nigerian authorities following the detention of its head of financial crime

IRS draft tax form for crypto defines unhosted wallets as brokers

The IRS published a draft version of its 1099-DA reporting form and controversially included unhosted crypto wallets among its targets on April 19 Ji Kim, Chief Legal and Policy officer at the Crypto

Human Rights Foundation launches Finney Freedom Prize to reward contributions to Bitcoin for 110 years

The Human Rights Foundation (HRF) unveiled the Finney Freedom Prize on Bitcoin’s fourth halving day to celebrate the flagship crypto for enabling greater financial freedom for the world The

Halving Milestone: Block 840,000 Mined, Ushering in a New Chapter as Bitcoin Miners Face Shrinking Rewards

At 8:12 pm ET on Friday, April 19, 2024, the Bitcoin network marked its fourth block reward halving at block height 840,000 Block 840,000 was mined by Viabtc, securing the notable ‘epic

Shiba Inu Headed Toward Critical Support Threshold With 2 Trillion SHIB Buys

Shiba Inu (SHIB) has established a critical price support level amidst the market-wide downtrend, which has kept crypto prices down This support level has been established thanks to a host of Shiba
- Advertisement -spot_img