US Cryptocurrency and ICO Regulations Push Business Overseas

First of all bravo for Coinbase, with a lot at stake itself, for getting this issue right in the following quote:

There is so much uncertainty about the definition of a security and the scope of regulatory control that the market is being chilled. This is bad for everyone because the technology won’t stop — it will simply move overseas and we will miss out on the opportunity to cultivate the benefits in the U.S.

Much like I’ve been saying is that governments who are overly aggressive, ambiguous and don’t create a fair playing field for cryptocurrency and related companies will be sidelined.  Cryptocurrency cannot be contained by borders anymore than the web could be.  Naturally, I do agree certain practical laws and regulations should apply but the laws should be clear and easy to follow.  If companies are essentially being threatened, raided and faced with uncertainty it hurts both the company and investors.  Ultimately as I’ve said before it will drive these huge sums of money away to countries that treat cryptocurrency users, traders and companies well.

There are so many conflicting statements from governments around the world and multiple bodies in the US.  It sometimes seems as if government officials and bankers who have a lot of input in these matters diverge on the matter.  This is OK but it should not be reflected by creating an atmosphere of fear and confusion whether by design or by fluke.

We all see the market has been impacted significantly with nothing but negative press for cryptocurrency but I believe it will resolve on the upside as investors realize it isn’t going anywhere and no single government or bank can ever stop it.  In fact I predict that the market may just start using more privacy and security based coins and trade them exclusively and directly for goods, bypassing fiat altogether.  Ironically this is probably the last thing governments and banks want but this is where all of this action is heading towards in my opinion.

 

SEC Helps and Hinders ICO’s with Reg-A+

Basically the SEC is making it easier for cryptocurrencies to legally IPO with an ICO if that makes sense.  They have lifted the caq from 50 million to 75 million and a few ICOs have already launched under this rule.  The SEC’s aggressive pursuit of cryptocurrency projects, traders and exchanges will either have one of two effects in my opinion.

  1. The SEC could create a strong cryptocurrency ecosystem if it is fair with its rules and regulations.  This would be positive for the US cryptocurrency market.
  2. The SEC could completely alienate cryptocurrency users, traders and exchanges and force the majority of money to move offshore and this would be disasterous for the US economy but not necessarily cryptocurrency in the longterm.

It is concerning that the SEC seems to be going after even large firms and ICOs like tZero.  If they are trying to show no one will be exempt they’re doing a good job but they’re also giving incentive to ICOs and related business to move away from SEC jurisdiction.  Another concern is that the SEC as a branch of the US government can now legally and literally censor ICOs.  If an ICO is coming out that restores free speech and the US government doesn’t like this do you think they will be allowed to ICO by the SEC?  It could lead to far more than just financial consequences very quickly.

Only time will tell where things head but so far I suspect things are heading out of the SEC jurisdiction and people, especially investors, may view US cryptocurrency companies as a ticking time bomb or at least a liability.