The leading crypto exchange Binance has acknowledged that the regulatory environment in the US has made it difficult to do business while expressing a desire to seek regulation in the UK. The company’s chief strategy officer Patrick Hillmann mentioned this During the Financial Times’ Crypto and Digital Assets Summit
Hillmann cited the recent action taken against Coinbase by the securities and exchange commission SEC for alleged securities laws violations, saying the US has been “very confusing” in the past six months. Binance itself has been slammed with a court case by the commodities futures trading commission (CFTC).
Because of the fear and uncertainty created by the poor reguation, Binance cancelled a deal to acquire bankrupt Voyager’s assets. Coinbase has since challenged the SEC’s lack of regulatory clarity which has hindered the growth of the industry following allegations by the commission.
The exchange is demanding that the SEC creates a clear regulatory framework for the industry instead of hiding in the shadows while harassing crypto comapnies. The court has ordered the SEC to respond to the request made by Coinbase.
If Coinbase wins the case, the SEC may be forced to bring regulatory clarity to the industry or leave it alone.
Binance Seeks UK Regulation
Binance has had its own issues with the UK, but clearly they are nothing compared to its travail in the US. The UK sanctioned the exchange for failing to provide critical information about its operations, making the local regulator – the financial conduct authority (FCA) – to conclude that the exchange was unregulated and should withdraw all regulated services in the country.
As it is, Binncne is ready to go back to the negotiation table and to do everything possible to secure regulation in the United Kingdom, according to Hillmann. This is hardly surprising as the UK seems to be making room for crypto companies to thrive.
The FCA recently invited crypto companies to contribute towards drafting a regulatory framework for crypto in the UK. This is a revolutionary approach as no country has asked for input from the industry in drafting regulations for it in the past.
With such an approach, the UK is clearly extending an invitation to companies like Binance and there has never been a better time to honor such an invitation. The UK prime minister Rishi Sunak is also a major supporter of crypto, which is also a positive for the industry.
The US Pushing Away Crypto Innovation
With the unclear crypto regulation in the US, many crypto companies have left the country, either fully or partially. Bittrex for example left last month, citing harsh regulatory environment. Coinbase and Gemini have both launched derivatives trading platforms outside the US where they are based.
According to republican lawmakers, the SEC is driving away crypto innovation from the country, while other countries like the UK are welcoming such innovation. Luckily, two committees have come together to work on regulation for the industry in the country.
If they succeed in bringing regulation, the industry may be revived but otherwise, more crypto companies may be departing the country to more friendly havens in the near future.
Ripple may be the next as it continues to battle with the SEC in court If it loses, there may be no reason to continue business in the US, and the situation may become worse for the industry.