News - Why clear crypto rules are crucial in the U.S.

By Mike Hesp

Why clear crypto rules are crucial in the U.S.

USA
Laws and regulations

The US will lose "technological leadership" if clear crypto-regulation does not get off the ground soon. Because even the American dream needs regulations.

"I meet daily with promising entrepreneurs who want to build the next great technological innovation in America, but don't know how to set up a blockchain company in accordance with the law," complains Anatoly Yakovenko, CEO of Solana Labs. The crypto industry urgently needs clear rules, otherwise the US will soon be left behind. For the founder, the location is becoming increasingly unattractive. Yakovenko is trying to convince Congress to adopt a crypto-friendly course, invoking "American values."

Poor starting conditions for crypto founders

The effort required to structure a blockchain start-up in the US to operate "in accordance with the law" is far too high and often involves "tens of thousands of dollars in legal fees," Yakovenko explains. The conditions for young entrepreneurs from his point of view: "frightening."

They see publicly traded billion-dollar companies struggling in the legal landscape and wonder how their small project will survive.

Anatoly Yakovenko, CEO of Solana Labs

According to data from Electric Capital, 42 percent of the world's open source blockchain developers were based in the U.S. in 2018. By 2022, that had dropped to 29 percent. Given the choice to "stay in America or pursue their dream, more and more founders are choosing to leave the country."

Without rules, it doesn't work

This fall, the U.S. House of Representatives will vote on two bills that could bring more clarity to regulation of digital assets. Yakovenko appeals to the "American values" of decision makers. According to the motto: The American Dream also needs rules. "Many of us are here because we want to create real value - and we want American values as the basis for the most influential companies in the world," Yakovenko says. He himself migrated from the Soviet Union to America at age 11, "where there were unlimited opportunities."

Not losing the band

To attract and retain the best talent in the industry, he says, the U.S. needs a strong regulatory framework that "protects consumers and encourages entrepreneurship." Solana's co-founder also points to international competition.

Imagine if Google had been founded in Russia or Reddit in China. How different would the Internet look today?

Congress must ensure that "America's technological leadership" is protected. The country should also take the lead in investing in blockchain development, he said. "European and Asian governments are already investing in blockchain," Yakovenko said.

Which country attracts blockchain developers?

Yakovenko's concerns do not seem unfounded. Regulators around the world are fine-tuning laws to bring order to the crypto industry. In Europe, the MiCA in effect, a comprehensive regulation of digital assets. Hong Kong also shows great ambitions and aims to become a new hotspot for the global crypto market.

De US has failed in recent years to establish a clear regulatory framework. With a strict course, authorities such as the SEC are trying to master the situation with sanctions and bans. So far without success. The Securities and Exchange Commission and its head, Gary Gensler, are increasingly coming under fire.

Electric Capital analyzed more than 5,000 profiles of Web3 developers on Github and verified their location:

Reducing fear of contact

Money for criminals: Bitcoin and Co. have gradually shaken off this image in recent years. It took a lot of publicity work to do that, and it will continue to do so. Investors and companies are increasingly venturing onto the Web,3 using blockchains, investing in cryptocurrencies and familiarizing themselves with them. Regulators would do well to adopt the same attitude.

Anatoly Yakovenko also believes this. Political decision-makers should experiment with the technology themselves. A major problem is that most officials who regulate digital assets are not allowed to use it. This makes it difficult to develop good policies: "Imagine trying to regulate social media without ever having opened Facebook!"

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