TechScape: The US is clamping down on cryptocurrency – is the UK next?

  • June 13, 2023
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Regulators have launched two big lawsuits against Binance and Coinbase, and Rishi Sunak could mine the benefits

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Rishi Sunak’s techno-moment has come. Unfortunately for him, it might be too late.

Last week, the US Securities and Exchange Commission (SEC) launched a pair of lawsuits against the country’s biggest cryptocurrency exchanges, Binance and Coinbase.

The SEC complaint alleges that [CEO Changpeng Zhao] directed Binance to conceal the access of high-spending US customers to Binance.com. In one piece of evidence included in the lawsuit, the Binance chief compliance officer messaged a colleague saying: “We are operating as a fking unlicensed securities exchange in the USA bro.” Elsewhere in the lawsuit, Binance’s CCO is quoted as saying: “We do not want [Binance].com to be regulated ever.”

“Since at least 2019, through the Coinbase platform, Coinbase has operated as an unregistered broker … an unregistered exchange … and an unregistered clearing agency,” the SEC said in its complaint. “Coinbase has for years defied the regulatory structures and evaded the disclosure requirements that Congress and the SEC have constructed for the protection of the national securities markets and investors.”

Paul Grewal, the chief legal officer and general counsel of Coinbase, said: “The SEC’s reliance on an enforcement-only approach in the absence of clear rules for the digital asset industry is hurting America’s economic competitiveness and companies like Coinbase that have a demonstrated commitment to compliance.

California-based Andreessen Horowitz (A16Z) said Britain was on “the right path to becoming a leader in crypto regulation”. The venture capital firm’s new office will open later this year and will be dedicated to investing in crypto and tech startups in the UK and Europe.

Chris Dixon, the head of crypto investing at Andreessen Horowitz, wrote in a blogpost: “While there is still work to be done, we believe that the UK is on the right path to becoming a leader in crypto regulation.

As we cement the UK’s place as a science and tech superpower, we must embrace new innovations like Web3, powered by blockchain technology, which will enable start-ups to flourish here and grow the economy.

“That success is founded on having the right regulation and guardrails in place to protect consumers and foster innovation. While there’s still work to do, I’m determined to unlock opportunities for this technology and turn the UK into the world’s Web3 centre.

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