Crypto regulations have proven to be a slippery slope so far, with governments around the world continuing to suppress the industry’s organic growth by instilling poor policies and a general disregard for cryptocurrencies.
Yesterday, our CEO @jesseproudman presented to the Washington State Senate Banking Committee on the challenges of regulating digital assets.
A copy of that testimony and the accompanying materials can be found here:https://t.co/DaWYdI296Q
— Strix Leviathan (@StrixLeviathan) December 2, 2020
Proudman, whose company operates out of Washington state in the US, who recently testified at the State Senate about the stark lack of crypto and blockchain regulations in the country and the potential of a huge exodus of talent as other countries embrace the technology more formally.
Be friendly towards crypto firms
In a release shared with CryptoSlate, Proudman said that startups choosing to do business in Washington are expending resources to interpret existing regulation and anticipate future regulation as it pertains to these new business lines in good faith.
However, Proudman noted that as these technologies evolve faster than the state of regulation, many startups are left behind in a “nebulous grey zone.” “Retroactive penalties for regulatory violations that may not have been clear at the time of infraction will continue to deter blockchain startups from establishing a presence in Washington State,” he stated.
It’s not just small companies facing such ill-effects. Large players like Ripple, the issuer of XRP, are also considering a move away from US shores as ever-changing and tightening laws, lack of recognition, and the slow pace of policies have crippled the organization in several ways.
The environment is worse for upstarts. Regulatory uncertainty and conflicting information lead to an expensive legal burden for startups in the state, explained Proudman, adding that this aspect has a “direct impact on job growth in the industry.”
He added that while Strix Leviathan is a “very lean” team, the legal and regulatory costs are a significant drain on resources. As such, the team has paid $189,101 in legal fees in 2018 (15% of all expenses), $206,708 in legal fees (21% of all expenses) in 2019, which has caused a drain on its resources and ability to expand.
2017 ICO mania is long gone
In the testimony, Proudman raised several points to the Senate regarding the various differences of today’s crypto market compared to the one in 2017, a time when ICOs ran abound and raised billions of dollars from the market with little to show.
Some of these points were:
- Blockchains are Transparent Ledgers: More transparency than most appreciate. AML / KYC / OFAC Checks are industry standards. Money laundering as a fraction of total transaction volume is orders of magnitude smaller than in traditional fiat currencies.
- Functioning Products and Platforms: 2017’s “ICO” fundraising craze resulted in lofty ideas with limited execution. Fast forward three years and we’ve seen an enormous shift in the sophistication and capabilities of this asset class.
- Industry Security Has Improved Dramatically – Hacks and theft prevalent in the 2015-2017 era markets have been reduced given focused industry attention and the rise of qualified custodians focused on safe storage.
As Proudman best put it, “The charlatans have largely been banished after a three-year drought.”
You can watch the full video of Proudman’s testimony below:
Like what you see? Subscribe for daily updates.