The chief executive of ARK Invest says that the U.S. Securities and Exchange Commission’s (SEC) latest enforcement actions could have a negative impact on the competitiveness of the country’s crypto industry.
Cathie Wood says that regulatory differences between nations could push foreign exchange platforms ahead of US-based ones.
According to Wood, the SEC’s crackdown on crypto firms could stifle US competitiveness, giving outside exchange platforms a leg up.
“So, activity moves to offshore exchanges or to self custody, self sovereignty, and self control? Decentralization wins. Great! Given regulatory arbitrage, however, US exchanges lose to foreign exchanges, not so good for US competitiveness in the crypto revolutions, in my view.”
Wood is referring to the SEC’s decision to attack US-based crypto platform Kraken, which forced the firm to shutter its staking program and pay a $30 million fine. Pro-crypto SEC Commissioner Hester Peirce said that attempts to regulate the industry through enforcement is both unfair and inefficient.
Popular economist and crypto trader Alex Kruger agrees with Wood on the issue of decentralization, saying that banning US exchanges from being able to offer staking services could cause Ethereum (ETH) to become a more decentralized asset.
“See this spin kicking in in a few weeks… similar to how it happened when China banned Bitcoin (the last time!) and narrative spinners turned it into, ‘This is good for Bitcoin as now mining will be concentrated in the US instead of in China.’
Positive narrative spin for later: banning US exchanges/custodians from offering staking services pushes staking offchain or abroad [means] ETH is no longer centralized and under the grasp of US regulators. Decentralized ETH is better ETH.”
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Source: https://dailyhodl.com/2023/02/13/ark-invests-cathie-wood-says-sec-crypto-crackdown-great-for-decentralization-but-not-so-good-for-us/