By George Ward
The Commodity Futures Trading Commission (CFTC), a US financial regulator, announced the launch of enforcement against Binance, the world’s largest cryptocurrency exchange. The CFTC’s move against Binance and Binance’s CEO, Changpeng Zhao (CZ), caused a drop in the overall valuation of the cryptocurrency market.
This incident highlights the growing scrutiny that US financial regulators are placing on crypto firms. Hence, some experts suggest that the industry players may shift their head offices to other countries with less regulatory oversight.
Increased Uncertainty For Crypto Companies
Susan Friedman, the Head of Public Policy at Ripple Labs, has also weighed in on the recent enforcement action taken by the Commodity Futures Trading Commission (CFTC) against Binance. Friedman opined that other jurisdictions worldwide have already developed comprehensive regulatory frameworks to govern the cryptocurrency industry while the CFTC still struggles to keep up.
Susan Friedman highlighted that the lack of clarity from regulators, particularly the CFTC, on how to regulate crypto has left the industry in uncertainty. Given this lack of transparency and slow progress, Friedman believes it is not a question of whether crypto companies will leave the US but how fast it will happen.
Other Ripple Executives Comment
Meanwhile, Ripple Labs, co-founder Chris Larsen, and CEO Brad Garlinghouse are still involved in a legal battle with the Securities and Exchange Commission (SEC) over the sale of XRP, Ripple’s governance cryptocurrency. The SEC claims that Ripple and its officials violated US securities laws by marketing XRP as an unregistered asset.
However, Ripple and its executives deny wrongdoing and contend that XRP is not a security. Both sides are waiting for the much-anticipated summary ruling regarding this lawsuit.
Stuart Alderoty, the Chief Legal Officer of Ripple, has criticized the US SEC’s approach to the crypto industry, particularly its claims that companies must register with the regulator. Alderoty has also been a vocal critic of the SEC’s actions against Ripple, which he and others at the company believe have been excessive and unfair.