By George Ward
According to industry experts, the recent Wells notice issued by the SEC to Coinbase, amidst the US’ tightening regulations on cryptocurrencies and crypto firms, will hinder innovation in the crypto industry and potentially harm the country’s economy.
More Wells Notice To Come In The Future – Industry Observers
During the week, Coinbase received a Wells notice, making it the most recent crypto firm to face such action. This comes a month after Paxos, a stablecoin issuer, received a similar notice.
Meanwhile, pundits argue that other crypto companies may soon face similar warnings. According to Mati Greenspan, the head of Quantum Economics, regulators in the US have been hostile towards cryptocurrencies “from the outset.”
Besides, the recent failures of banks that were known for their support of startups and crypto, such as Silvergate, Signature Bank, and Silicon Valley Bank, have raised concerns among some experts that regulators are attempting to “un-bank” the crypto industry in what is being referred to as “Operation Choke Point 2.0.”
Meanwhile, the US White House released an economic report that took a critical stance on the usefulness of crypto assets. The report dedicated an entire chapter to discrediting the supposed advantages of cryptocurrency many promote.
According to Greenspan, there may be some truth to the rumors of potential action against crypto. Regulators consider it a “threat” to the longstanding advantage of the USD’s dominance in global trade.
Besides, more countries are considering using crypto for cross-border remittances. Hence, removing crypto from the US banking system could have the opposite effect. According to him:
“If cryptocurrencies were to be surgically removed from the American banking system, it would only further isolate the US and undermine the USD’s status as the world’s reserve currency.”
Crypto Firms Might Move Overseas – Przelozny
According to Adrian Przelozny, the CEO of Independent Reserve, an Australian cryptocurrency exchange, crypto is not responsible for the recent bank crisis.
Instead, he believes these issues have arisen due to banks irresponsibly managing their risks. Przelozny further suggests that the White House should focus on scrutinizing the banking industry’s practices rather than retaliating against the crypto sector.
Przelozny also commented on the SEC’s latest action against Coinbase. He said the US had created a hostile environment for the crypto industry, which could force future innovations, jobs, and investments to move overseas.
Additionally, he stated that countries such as Hong Kong, Singapore, and Australia, which recognize the potential benefits of the crypto industry, could serve as better alternatives. In his opinion, these countries are poised to reap the economic advantages of the crypto industry.