How the US will pay the price for greater crypto regulation

As US regulators turn their sights on crypto companies, does this mean other countries have a chance to become a crypto hub?

The United States Securities and Exchange Commission (SEC) is hunting Web3 companies with its strict guidelines. Recently fined Kraken $30 million and ordered the closure of its stake reward facilities.

Subsequently, the SEC warned Paxos of possible legal action for violations of the Securities Act. Regulators also oppose the listing of Bitcoin spot Exchange Traded Funds (ETFs.) But it is the SEC’s lawsuit against Ripple Labs that is the most notable.

Countries are vying to become crypto hubs

While the United States has taken a stricter stance against crypto companies, other countries maintain a more accommodating stance. Hong Kong’s Finance Minister Paul Chan announced in January that they are working to turn the country into a crypto hub. Following the announcement, Singapore-based DBS Bank and Huobi Exchange unveiled plans to expand operations into the territory.

The UK is steadily moving towards full crypto regulation. It has entered the second phase of its journey towards regulation, with the government seeking feedback from industry stakeholders. UK Prime Minister Rishi Sunak envisions turning the country into a crypto hub.

This month, Dubai released rulebooks to provide specific frameworks for Web3 firms. Already a favorite destination for crypto-related events and conferences, the country aims to position itself as an international crypto hub.

In Asia, South Korea is using blockchain technology to its full potential. Busan, one of the fastest aging cities in South Korea, wants to become crypto-friendly to attract immigration from younger people. The city has also entered into an agreement with Binance to establish a public crypto exchange. South Korea is also building public metaverses in Seoul and Seongnam. Recently, the Asian country also allowed the issuance of security tokens for corporate ownership.

El Salvador and the Central African Republic have made Bitcoin legal tender. El Salvador has committed to the mass adoption of Bitcoin, and intends to educate 250,000 students about Bitcoin by 2023. The government has also launched a special Bitcoin office to manage all cryptocurrency-related projects.

Investors and companies moving away from the US

With the United States avoiding greater crypto adoption and other countries supporting it, firms are slowly moving away from the nation. Sheila Warren, CEO of the Crypto Council for Innovation, told Bloomberg: “By favoring enforcement rather than adopting rules in line with other regions, the US has left both regulators and companies struggling with what is essentially a guessing game . about what might come next.”

Zhuling Chen, CEO of RockX, says: “Given the increasing level of regulatory scrutiny and enforcement we’ve seen, more US crypto investors are getting a little nervous. Those who have an interest and want to stay in crypto will choose friendlier countries, where the rules are manage.”

And Jeff Dorman, Chief Investment Officer at Arca, says new Web3 firms “don’t even bother with the US”

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