But, there’s one interesting point here. Considering this unclear regulatory situation, how did exchanges like Coinbase, Gemini, Bittrex, Kraken, Binance US, and many others make such a huge impact? Didn’t they have to deal with the same situation as other exchanges that relocated?
Alex Mashinsky CEO of Celsius addressed these questions in a recent podcast and opined that the US wasn’t falling behind in any way with respect to cryptocurrencies and that regulatory laws were just fine. He further stated,
“First of all, there’s nothing one can point to as being against the blockchain technology. All people that are whining about the SEC regulations did not simply follow the rules. Secondly, when you deal with people’s money, the government is obviously strict about it. I disagree that there is any kind of negativity or slowdown. In fact, banks have gone against crypto but there hasn’t been any friction from SEC.”
A CBInsights report titled ‘Coinbase Strategy Teardown’ had also noted that the main reason for Coinbase to have emerged to its current position is largely a result of its excellence in security, regulatory compliance, and ease-of-use. It had noted that Coinbase differentiated itself from other exchanges by cooperating heavily with law enforcement by following strict identity verification procedures to comply with regulations like KYC and AML. Similarly, other exchanges like Gemini, Bittrex, and Kraken have also abided by the regulations and made their way into the US crypto market.
On the other hand, Binance US’s CEO Catherine Coley recently made an interesting argument. In her opinion, the exchanges that are coming into the business in recent times have more advantages than the established ones. She had noted,
“We’ve come into the game a little late and therefore we’re able to see the landscape, understand, not be the first application that says I’d like to run a digital asset marketplace and see their heads just turn and go.”
If this is the case, the US should see a rise in cryptocurrency exchanges. However, putting things in perspective, the fact that many crypto start-ups do not want to comply with the SEC rules might the main reason for them declaring that the US has an uncertain regulatory situation.