Commentators argue that removing cryptocurrency will only diminish the USD’s dominance

A day after Coinbase received a Wells notice from the Securities and Exchange Commission, industry observers weighed in on what recent regulatory measures signal for the future of crypto in America.

In the aftermath of Coinbase’s recent Wells warning from the Securities and Exchange Commission, industry pundits argue the US crackdown on cryptocurrencies and crypto businesses will only serve to hinder crypto-related innovation and “weaken” the country.

The crypto exchange became the latest crypto firm to get a “legal threat” – a Wells notice — on March 22, only a month after stablecoin issuer Paxos received one in February. Some speculate that there may be more to come.

Mati Greenspan, CEO of crypto research firm Quantum Economics, believes US regulators have been anti-crypto “from the beginning.”

The recent failures of crypto and startup-friendly banks such as Silvergate, Silicon Valley Bank, and Signature Bank have been interpreted by some as part of a regulator-led plot to de-bank the crypto industry called “Operation Choke Point 2.0.”

Meanwhile, the White House’s March 20 economic report transformed into a harsh assessment of the virtues of crypto assets, with the publication devoting nearly an entire chapter to discrediting crypto’s “touted” benefits.

Greenspan told our source that the rumoured action could be underway because cryptocurrency is considered as a “threat” to the United States’ dominance in global trade – a huge and long-standing benefit to the United States.

However, as more people begin to utilise cryptocurrency for cross-border transfers around the world, he warned that a crackdown on cryptocurrency in the United States might have the reverse effect on the dollar:

“Surgically removing cryptocurrencies from the US banking system will only further isolate the US and weaken the dollar’s position as the global reserve currency.”

According to Adrian Przelozny, CEO of Australian crypto exchange Independent Reserve, the recent banking sector troubles were not caused by “any failure in crypto,” but rather by banks handling their risks in a “irresponsible” manner.

“The White House would be better served to review banking industry practices,” he continued.

In response to the most recent action against Coinbase, Przelozny stated that the “adversarial environment for the crypto industry” in the United States will drive “jobs, investment, and future innovation” offshore.

“Singapore, Hong Kong, and potentially Australia,” who are eyeing the benefits of the crypto business, may prove to be a better home for it, and those countries “will reap the economic benefits,” according to Przelozny.

The precise grounds for the regulator’s targeting of Coinbase remain unknown. The SEC has refused to comment on the situation.

Piper Alderman partner Michael Bacina agreed that a “regulation by enforcement model” would “drive crypto-asset innovation offshore,” adding:

“This is an odd position to take given the losses many have suffered in the last year as a result of collapses involving unregulated offshore structures.”

According to Bacina, the sector has been asking for clarity on how to comply for years. He cited the judge’s recent “telling” comments in Voyager Digital’s bankruptcy case, in which he “observed that there is no clear guidance from regulators.”

He went on to say that offshore jurisdictions will continue to harbour cryptocurrency firms unless governments laid out a path to regulatory compliance, “which will cost jobs and raise the risk for consumers and investors.”


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