The enforcement approach to crypto regulation in the U.S. is likely to cause the loss of 4 million jobs by 2030, a recent analysis by Coinbase shows. Coinbase says the approach risks the U.S. one million developer jobs and three million non-technical jobs over the next seven years.
It is no longer news that the U.S. securities and exchange commission (SEC) has cracked down on crypto and crypto companies in the country, particularly this year. As a result, many crypto companies have fled the country to other jurisdictions that have adopted more friendly approaches to regulation.
According to Coinbase, the uncertainty caused by such crackdown and the exit of crypto companies has already caused a 29% decline in the country’s web3 market share from 40% five years ago. The report also says the approach is pushing jobs and opportunities offshore, and the U.S. is losing about 2% of web3 market share every year.
“68% of Blockchain jobs are now in Europe. This isn’t accidental. It is the result of political will, leadership, openness to opportunity and policymakers taking responsibility and doing the job they were elected or appointed to do,” Coinbase wrote on its official Twitter handle.
”This enforcement-only approach continues despite courts having ruled against the SEC in a number of high-profile cases,” it said. “This enforcement-only approach continues despite 52 million people — or one in five Americans — owning crypto.”
SEC not Doing Enough
The major challenge with regulation in the U.S. is a lack of regulatory clarity. This has been raised as a concern to the SEC, but it hasn’t done anything to help with clarity. Coinbase has also filed a suit asking the SEC to draft a regulatory framework for the industry. The SEC however maintains that there’s sufficient guidance for the industry.
Coinbase says that this lack of regulatory clarity is what drives crypto companies to jurisdictions that have clear regulatory guidance. In fact, an estimated 83% of major financial hubs in the world are doing more to establish greater regulatory clarity for the crypto industry, leaving the U.S. behind.
“The US has a real chance to be the innovation leader in the future of the crypto economy, but only if it can get the regulations right,” it said. “We cannot afford to spend billions of dollars begging to bring the crypto industry back to American soil, like we’ve done with the chip industry and American manufacturing in general.”
Divergent views on SEC Crackdown
While there is a wide outcry against the crackdown on crypto in the U.S, there are sections of the country that are in support of the crackdown, particularly Democrat lawmakers. Chairman of the influential Senate Committee on Banking, Housing, and Urban Affairs, Senator Sherrod Brown had at a hearing on the SEC’s oversight praised the SEC’s approach.
“It seems like every day, before and after the collapse of FTX, there is another crypto scam, hack, or insider taking advantage of people,” said Brown. “That’s because the problems we saw at FTX are everywhere in crypto – the failure to provide real disclosure, the conflicts of interest, the risky bets with customer money that was supposed to be safe. FTX was just the biggest and the ugliest.”
Current trends however suggest that lawmakers are working on regulation for the industry, and the courts have also supported the industry through its most recent rulings.