United States regulator’s response to the crypto industry may aid XRP in the end, but is also likely to hurt rapidly flourishing companies, as opined by David Schwartz, the Chief technology officer of Ripples lab.
A deterring regulatory environment is being faced by plethora of Crypto and blockhain firms that are longing to start in the United States or are relocating to abroad. The regulatory framework is overlapping, in the sense that Commodity Futures trading, Financial Crimes Enforcement Network and Securities and Exchange Commission are still yet to agree on what currency or security is as regards to digital assets.
“It’s very difficult to figure out which laws apply and how they apply to something new,” said Schwartz. “That you generally don’t see in other countries — there’s some entity that makes the rules and at least you know you’re talking to the right party.”
He added:
“The United States is one of the few countries where there’s this very palpable risk that the regulators will turn to you and say, ‘That thing that you were doing for five years, in public and complete light of day? Well, you should have known it was illegal all along.'”
Schwartz’s comments come as Ripple is facing legal action from the SEC, which filed a lawsuit in December 2020 alleging the firm, CEO Brad Garlinghouse and co-founder Chris Larsen had been conducting an “unregistered, ongoing digital asset securities offering” with their XRP token sales. The chief technology officer said he had been wary of regulators coming down on Ripple prior to the lawsuit, claiming any firm in the crypto space took the risk of seemingly arbitrary crackdowns.