The "wild west" of crypto regulations
Countries around the world opt for varying approaches to regulate crypto. What matters is how we go forward from here.
Messari founder Ryan Selkis announced plans to run for the U.S. Senate in 2024. He has been increasingly vocal against stringent cryptocurrency regulation but the final straw, he said, was when the SEC showed up at #mainnet2021 and served one of the speakers with a subpoena.
The regulatory landscape in the global crypto space has always been unsynchronous and wildly blurry. From a bird's eye view, the current landscape can be divided into
Pro legalization
Restricted or banned
Let's wait and watch
and the USA
Countries like El Salvador, Cuba, and Ukraine have been increasingly favorable for crypto. What began as small experiments have led to legalization, enabling both the users and the govt to grow their treasury, albeit with the scrutiny from the IMF and the increased volatility.
On the other end of the spectrum are countries like China, Qatar, and Bangladesh, that have outright banned exchanges and the use of crypto. This still makes sense as there is a clear denotation of what to expect.
Countries like India and South Korea and in the middle of the spectrum operating in "wait and watch" mode with positive signs from the leadership to give enough benefit of the doubt and thoroughly understand the implications before making a decision.
What's strange is the stance taken by the USA. On the one hand, like a broken record, they aim to protect the investors/users, but on the other hand, they also threaten organizations to follow their rules to the extent of filing a subpoena.
It's basically a wolf in sheep's clothing.
Since the past few months, the crypto regulations in the USA have tormented the larger crypto markets will consistent sell-offs and criticism triggered by actions taken by the SEC. Let's break them down.
Apart from the chatter on the infrastructure bill, which was nothing short of a soap opera. The major incidents that have made crypto traders lose all hope in the SEC are
Coinbase Lend program
Uniswap investigations
Coinbase is one of the most trusted and legally regulated exchanges around the globe. They are, in fact, the only exchange to go public. They have been closely working with the SEC to offer a Lend program to its users, to which, in the final stages, the SEC sent a notice to sue Coinbase should its "Lend" product launch.
The other incident is an investigation into the Uniswap Labs team. The enforcement attorneys are trying to pick up dirt on the team by looking for information about Uniswap's marketing and investor services.
Gary Gensler, the one whom we all thought would support the crypto revolution, is at the helm of it all. The SEC chair has doubled down efforts to regulate DeFi space, including token offerings and the use of stablecoins. Gary, we are still waiting for the promised bitcoin EFTs.
What's annoying is that for all the actions taken by the SEC, they have always acted under the shadows and have failed to provide any explanations or sound reasons. Protecting investors is not a strong one, as most of them are using DeFi already.
The current web 2 ecosystem relies heavily on the services model where users use the products and pay them through money or their data. Web3 is a paradigm shift enabling the users to contribute and have a piece. It is understood that we are in the early stages of this journey, and many aspects will evolve. What's needed is to work together with the governments and allow for innovation to thrive.
Endnote
The Crypto community has always been open to dialogue and has supported the probes and investigations earlier. What we need is a similar acceptance from the govt and to keep an open mind. It all makes sense with Ryan looking to run for senate; we can hope things can change when one of us is on the inside.