{"id":2868,"date":"2020-12-13T12:08:58","date_gmt":"2020-12-13T12:08:58","guid":{"rendered":"https:\/\/timestampmag.com\/?p=2868"},"modified":"2021-09-08T09:55:21","modified_gmt":"2021-09-08T09:55:21","slug":"the-effect-of-u-s-regulations-on-crypto-companies","status":"publish","type":"post","link":"https:\/\/timestampmag.com\/2020\/12\/13\/the-effect-of-u-s-regulations-on-crypto-companies\/","title":{"rendered":"The Effect of U.S. Regulations on Crypto Companies"},"content":{"rendered":"<ul>\n<li><b>The United States has one of the most complex, non-existent crypto regulations with no common ground. The CFTC describes Bitcoin as a commodity, while in contrast, the IRS sees it as a property.\u00a0<\/b><\/li>\n<li><b>Despite the vague regulatory framework, the U.S. regulations and authorities have been notorious for clamping down on cryptocurrency exchanges.\u00a0<\/b><\/li>\n<li><b>Following these uncertainties and numerous lawsuits, Ripple has hinted at moving its headquarters overseas. <\/b><\/li>\n<\/ul>\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"aligncenter wp-image-2869 size-full\" src=\"https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/10\/image3-3.jpg\" alt=\"u.s. regulations\" width=\"880\" height=\"400\" srcset=\"https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/10\/image3-3.jpg 880w, https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/10\/image3-3-300x136.jpg 300w, https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/10\/image3-3-768x349.jpg 768w\" sizes=\"(max-width: 880px) 100vw, 880px\" \/><\/p>\n<p>&nbsp;<\/p>\n<h1><strong>Latest crypto news<\/strong><\/h1>\n<p><span style=\"font-weight: 400;\">If you run a cryptocurrency firm and an avid <span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Crypto trading blogs&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15289,&quot;3&quot;:{&quot;1&quot;:0},&quot;6&quot;:{&quot;1&quot;:[{&quot;1&quot;:2,&quot;2&quot;:0,&quot;5&quot;:{&quot;1&quot;:2,&quot;2&quot;:0}},{&quot;1&quot;:0,&quot;2&quot;:0,&quot;3&quot;:3},{&quot;1&quot;:1,&quot;2&quot;:0,&quot;4&quot;:1}]},&quot;7&quot;:{&quot;1&quot;:[{&quot;1&quot;:2,&quot;2&quot;:0,&quot;5&quot;:{&quot;1&quot;:2,&quot;2&quot;:0}},{&quot;1&quot;:0,&quot;2&quot;:0,&quot;3&quot;:3},{&quot;1&quot;:1,&quot;2&quot;:0,&quot;4&quot;:1}]},&quot;8&quot;:{&quot;1&quot;:[{&quot;1&quot;:2,&quot;2&quot;:0,&quot;5&quot;:{&quot;1&quot;:2,&quot;2&quot;:0}},{&quot;1&quot;:0,&quot;2&quot;:0,&quot;3&quot;:3},{&quot;1&quot;:1,&quot;2&quot;:0,&quot;4&quot;:1}]},&quot;10&quot;:2,&quot;11&quot;:0,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:11}\"><a href=\"https:\/\/timestampmag.com\/category\/blog\/\" target=\"_blank\" rel=\"noopener\"><strong>Crypto trading blogs<\/strong><\/a> reader<\/span>, you will be much concerned about aligning your company with existing jurisdictional laws or better still attempt to move to a more favorable jurisdiction if your business is currently being threatened by your immediate environment. Despite the technological prowess the United States commands, the region doesn\u2019t yet rank as the top destination for blockchain and cryptocurrency. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">When it comes to the <\/span><span style=\"font-weight: 400;\">crypto industry<\/span><span style=\"font-weight: 400;\">, regulations are an important aspect of the industry and play a key role in how blockchain products strive in a given region, especially for an emerging industry of this nature. As at this time, it\u2019s still very difficult to find a consistent legal approach to cryptocurrencies in the United States.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Regulations governing cryptocurrency products, firms, and exchanges vary by state, and federal authorities actually differ in their definition of the term \u2018cryptocurrency\u2019. The Commodities Futures Trading Commission (CFTC) <\/span><span style=\"font-weight: 400;\">described<\/span><span style=\"font-weight: 400;\"> Bitcoin as a commodity, while in contrast, the IRS <\/span><span style=\"font-weight: 400;\">proscribed<\/span><span style=\"font-weight: 400;\"> Bitcoin as property, and as such Bitcoin is taxable.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">One would argue that this diversity in the U.S regulation on cryptocurrency has only contributed to making the whole system more complex. So far, <\/span><span style=\"font-weight: 400;\">the direction of United States regulatory bodies towards blockchain and crypto remains vague.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The Financial Crimes Enforcement Network (FinCEN) doesn&#8217;t regard cryptocurrencies as legal tender. However, in 2013, crypto exchanges were <\/span><span style=\"font-weight: 400;\">regarded as money transmitters<\/span><span style=\"font-weight: 400;\">, although subject to various jurisdictions, on the grounds that tokens are \u201cother value that substitutes for currency\u201d.\u00a0<\/span><\/p>\n<h2><b>U.S. Regulations And The Crypto Industry<\/b><\/h2>\n<p><img decoding=\"async\" class=\"aligncenter wp-image-2870 size-full\" src=\"https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/10\/image2-8.jpg\" alt=\"\" width=\"1920\" height=\"1000\" srcset=\"https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/10\/image2-8.jpg 1920w, https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/10\/image2-8-300x156.jpg 300w, https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/10\/image2-8-1024x533.jpg 1024w, https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/10\/image2-8-768x400.jpg 768w, https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/10\/image2-8-1536x800.jpg 1536w\" sizes=\"(max-width: 1920px) 100vw, 1920px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">Crypto regulations around the world are supposedly founded based on US regulations, providing a framework on which other nations should possibly build on top. <\/span><span style=\"font-weight: 400;\">With unclear regulatory directions, the US fell short of these expectations. Cryptocurrencies are not prohibited in the U.S., but they are still not integrated into the country\u2019s financial structure.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Recently, US regulators have been notorious for clamping down on cryptocurrency exchanges, BitMEX, and Okex for example. <\/span><span style=\"font-weight: 400;\">On October 1st, <\/span><span style=\"font-weight: 400;\">The Commodity Futures Trading Commission (CFTC) <\/span><span style=\"font-weight: 400;\">filed a civil enforcement action<\/span><span style=\"font-weight: 400;\"> in the U.S. District Court, levying a charge against BitMEX and the three individuals who run the trading platform.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The suit anchored on the operation of an unregistered trading platform and violating multiple CFTC regulations, including failing to implement required AML procedures. Although BitMEX had argued that they don\u2019t operate under the US jurisdiction, they were still caught in the web of US authorities.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Similarly, Malta-based cryptocurrency exchange, OKEx <\/span><span style=\"font-weight: 400;\">announced<\/span><span style=\"font-weight: 400;\"> on October 15 that it had suspended withdrawal of cryptocurrencies on its platform. This development was as a result of the exchange being out of touch with \u201cone of its private key holders.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The concerned private keyholder is reportedly cooperating with a public security bureau to aid further investigations. This once again points to the stringent regulations being witnessed in the States.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Without much emphasis, the U.S. regulation has been very nervous about encouraging any cryptocurrencies that could threaten the dollar\u2019s dominant position in global finance. This is beginning to have a telling effect on how US regulations are positioned with respect to cryptocurrencies and <\/span><span style=\"font-weight: 400;\">Bitcoin<\/span><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<h2><b>Unfavorable U.S. Regulations Could Lead To Mass Exodus Of Crypto Firms<\/b><\/h2>\n<p><img decoding=\"async\" class=\"aligncenter wp-image-2872 size-full\" src=\"https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/10\/image1-7.jpg\" alt=\"\" width=\"504\" height=\"243\" srcset=\"https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/10\/image1-7.jpg 504w, https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/10\/image1-7-300x145.jpg 300w\" sizes=\"(max-width: 504px) 100vw, 504px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">It\u2019s difficult to exist within a territory with no clear definitive laws, as it will be hard to say with certainty what manner of conduct might amount to grave penalties. Following this scenario, Chris Larsen, co-founder and executive chairman of Ripple Labs has revealed that the company is likely to move its headquarters overseas due to the unclear US regulations.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Speaking at the LA Blockchain Summit on October 6, <\/span><span style=\"font-weight: 400;\">argued that<\/span><span style=\"font-weight: 400;\"> almost every country besides the U.S. has a favorable system to regulate crypto, adding that U.K, Switzerland, and Singapore were top destinations and the most preferred location if it becomes apparent for the San Francisco-based company to leave the U.S. \u00a0 <\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cThe message is blockchain and digital currencies are not welcome in the U.S.,\u201d Larsen said. \u201cYou want to be in this business, you probably should be going somewhere else. To be honest with you, we\u2019re even looking at relocating our headquarters to a much more friendly jurisdiction.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Ripple CEO Brad Garlinghouse <\/span><span style=\"font-weight: 400;\">explained<\/span><span style=\"font-weight: 400;\"> further in a Tweet. \u201cResponsible players like Ripple aren\u2019t looking to avoid rules, we just want to operate in a jurisdiction where the rules are clear,\u201d\u00a0<\/span><\/p>\n<h2><b>Lack Of Proper U.S. Regulations Has Amounted To More Woes For Ripple<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Recall that Ripple has been involved in an <\/span><span style=\"font-weight: 400;\">ongoing lawsuit<\/span><span style=\"font-weight: 400;\"> alleging that the company sold its <\/span><span style=\"font-weight: 400;\">XRP<\/span><span style=\"font-weight: 400;\"> token in an unregistered securities offering, thereby violating <\/span><span style=\"font-weight: 400;\">state and federal securities laws. Following this claim, Ripple has argued that although they hold a large portion of the XRP, however, the digital asset is decentralized.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Thus far, the SEC has not released any official statement on the matter following its 2019 <\/span><span style=\"font-weight: 400;\">publication<\/span><span style=\"font-weight: 400;\"> on a regulatory fr<\/span><span style=\"font-weight: 400;\">a<\/span><span style=\"font-weight: 400;\">mework<\/span><span style=\"font-weight: 400;\"> for digital assets. As a result, Ripple continues to be summoned to Court partly because of a lack of regulatory clarity from the authorities. Learn <span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;How Does Ripple Work&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15289,&quot;3&quot;:{&quot;1&quot;:0},&quot;6&quot;:{&quot;1&quot;:[{&quot;1&quot;:2,&quot;2&quot;:0,&quot;5&quot;:{&quot;1&quot;:2,&quot;2&quot;:0}},{&quot;1&quot;:0,&quot;2&quot;:0,&quot;3&quot;:3},{&quot;1&quot;:1,&quot;2&quot;:0,&quot;4&quot;:1}]},&quot;7&quot;:{&quot;1&quot;:[{&quot;1&quot;:2,&quot;2&quot;:0,&quot;5&quot;:{&quot;1&quot;:2,&quot;2&quot;:0}},{&quot;1&quot;:0,&quot;2&quot;:0,&quot;3&quot;:3},{&quot;1&quot;:1,&quot;2&quot;:0,&quot;4&quot;:1}]},&quot;8&quot;:{&quot;1&quot;:[{&quot;1&quot;:2,&quot;2&quot;:0,&quot;5&quot;:{&quot;1&quot;:2,&quot;2&quot;:0}},{&quot;1&quot;:0,&quot;2&quot;:0,&quot;3&quot;:3},{&quot;1&quot;:1,&quot;2&quot;:0,&quot;4&quot;:1}]},&quot;10&quot;:2,&quot;11&quot;:0,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:11}\"><a href=\"https:\/\/timestampmag.com\/2020\/10\/23\/how-does-ripple-work\/\" target=\"_blank\" rel=\"noopener\"><strong>How Does Ripple Work<\/strong><\/a>?<\/span><\/span><\/p>\n<h2><b>Final Thoughts<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The vague regulatory framework in the United States accounts for most reasons why some top crypto exchanges exclude the US jurisdiction from their suite of services. With the speed at which China, France, and other nations are developing a Central Bank Digital Currency (CBDC), it is most likely that the United States will be far from leading the future of blockchain and cryptocurrency adoption.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Although the argument that the quickest runner doesn\u2019t always win the race remains valid, however, if regulatory uncertainties continue to cloud the US jurisdiction, we could see a mass exodus of <\/span><span style=\"font-weight: 400;\">crypto<\/span><span style=\"font-weight: 400;\"> firms to other favorable regulatory climes.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The United States has one of the most complex, non-existent crypto regulations with no common ground. The CFTC describes Bitcoin as a commodity, while in contrast, the IRS sees it as a property.\u00a0 Despite the vague regulatory framework, the U.S. regulations and authorities have been notorious for clamping down on cryptocurrency exchanges.\u00a0 Following these uncertainties [&hellip;]<\/p>\n","protected":false},"author":17,"featured_media":2871,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23,20],"tags":[2,393,398,4,34],"_links":{"self":[{"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/posts\/2868"}],"collection":[{"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/comments?post=2868"}],"version-history":[{"count":5,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/posts\/2868\/revisions"}],"predecessor-version":[{"id":51189,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/posts\/2868\/revisions\/51189"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/media\/2871"}],"wp:attachment":[{"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/media?parent=2868"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/categories?post=2868"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/tags?post=2868"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}