How Crypto Companies Are Making A Comeback In The U.S.
The U.S. Securities Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and Congress keep trying to find ways to regulate cryptocurrencies and Bitcoin (BTC). The recent wave of government enforcement against cryptocurrency companies is slowly and painfully killing off one of the most innovative industries in the country – as tens of crypto companies find new jurisdictions to set up shop. Coinbase (the largest crypto exchange in the U.S.) opened offices in Bermuda, some Binance board of directors members voted to liquidate Binance U.S., and Bittrex Exchange shut down its operations in the U.S., just to name a few.
Despite the regulatory crackdown in the U.S. industry, the fire of crypto to succeed in the world’s largest economy is still burning. Several startups and companies seek to relocate to or start new business ventures in the U.S. From Bitcoin mining companies to investment firms, crypto banking firms to health and fitness apps, and NFT-based companies to analytics firms – the U.S. still maintains its appeal to crypto investors and businesses.
The loud cry from companies aiming to launch in the U.S. is that regulators should provide guidance instead of regulation by enforcement to ease the uncertainty for businesses and individuals in the crypto space. As the regulators find their way, however, multiple businesses continue to build impactful and revolutionary technologies in the hope that, in future, the regulators will provide guidelines to streamline their businesses.
How crypto companies are brazing the regulatory pressures in the U.S.
In 2020, the SEC filed a lawsuit against Ripple Inc., alleging that it conducted an unregistered security offering by selling its XRP tokens worth $1.3 billion. However, last month, a District Court for the Southern District of New York judge determined that XRP does not constitute a security, which set a new precedent for how SEC defines cryptocurrencies.
While the judgement did not remove all uncertainty on crypto trading in the U.S., it implied that the SEC should provide clear guidelines on what cryptos constitute security. Following the ruling, several crypto tokens pumped in anticipation of better regulation policies from financial regulators in the U.S.
While Ripple survived in the courts, some Web 3 projects aim to bring regulators to the fold by offering real-world value to its users. For instance, Sweat Wallet, a move-to-earn DApp, announced it will launch in the U.S. this September, which aims to reward users for walking daily. The wallet allows users to earn $SWEAT tokens, which powers Sweat Economy. By participating in the ecosystem, users worldwide can become more physically active by earning $SWEAT token rewards in their Sweat Wallets or sweatcoins on the native Web 2 app, Sweatcoin.
Additionally, $SWEAT tokens will incentivize Americans to participate more in physical activities and establish a tangible financial unit of value for movement. This will democratize fitness and finance in the U.S., helping combat sedentary diseases such as obesity, diabetes Type 2, and cardiovascular diseases.
By offering real-world value and impacting society, Web 3 apps could help ease the strict regulations in the U.S. – pushing regulators to see the value blockchain and crypto bring to the country.
Riot Blockchain Inc.
The U.S. proposed tax on Bitcoin mining companies seems not to shake up the industry. Over the past few years, Bitcoin mining companies, have flocked to the United States in pursuit of cheap power. Headquartered in Castle Rock, Colorado, Riot Blockchain Inc. ranks as one of the largest publicly traded crypto mining firms.
While the question of excess electricity use and environmental preservation still lingers over Bitcoin mining companies, Riot Blockchain Inc. is changing the script by introducing renewable sources of electricity to its business plans. Previously, Riot released a statement that it uses the Texas electrical grid, described as the “cleanest and most renewable energy-sourced grid in the US.”
Notwithstanding, Bitcoin mining companies in the U.S. are championing more “renewables” to produce clean and green energy for their mining services.
Can crypto repair its relationship with US regulators?
Whether a crypto fanatic or not, it is clear that Washington is uncomfortable with the rise of crypto in the U.S. The recent failures of FTX and Celsius further exacerbated lawmakers' distrust towards crypto. Nonetheless, for crypto to succeed and gain back the trust of Washington, companies need to build impactful and revolutionary technologies, as seen above.
The launch of Sweat Wallet in the U.S. this September could help save billions of dollars in healthcare by minimizing the risks of weight-related diseases. Ripple’s case with the SEC could provide a more precise direction for the industry, forcing lawmakers to find plausible ways to regulate the industry instead of gradually chasing innovative companies and talent due to uncertainty. And mining companies could lead the way in finding new renewable energy sources to provide cleaner and greener electricity.
While the reputation of crypto has taken a few body blows from Washington, building valuable and impactful technologies around crypto and blockchain could be the first step to rekindling relationships in the Capitol and restoring trust with financial regulators.