The past week has been a difficult time for the U.S, crypto space. Following the Securities and Exchange Commission’s (SEC) move to categorize a number of major cryptocurrencies as securities, the sector has been reeling from the consequences of that decision.
But without intervention from policymakers, there is little hope that the situation will improve.
Stepping up to the challenge, Senator Cynthia Lumis has said she is working on “a regulatory framework that will allow individuals and companies to own and trade digital assets in America.”
Crypto Firms Turn Their Backs on U.S. Market
Trouble for the U.S. crypto sector started after the SEC announced its intention to take on Binance and Coinbase in lawsuits that accuse the two exchanges of selling unregistered securities.
In the immediate aftermath of the news breaking, Coinbase stock plummeted 18%. And within days, Binance U.S. was forced to suspend USD deposits and withdrawals.
Without mincing words, Binance openly criticized the SEC’s approach to crypto regulation, calling the commissions tactics “aggressive” and promising to “fight for a path forward.”
Even prior to the SEC’s recent actions, the global crypto landscape had already begun reorienting itself to be less U.S.-focused.
For example, Asian hourly spot volumes have grown 30% in 2023 amid declining volumes in the U.S.
And it isn’t just cryptocurrency exchanges and traders that could gain from pivoting toward alternative markets.
On Saturday, Polygon Labs published a statement emphasizing its global outlook and the history of the Polygon Network outside of the United States. In a veiled reference to the SEC’s classification of its MATIC token as a security, the company stated that:
“The non-US market is the largest in the world, and we are grateful for all the thoughtful work being done on all aspects of this technology around the globe, including by regulators & policymakers.”
Cynthia Lumis: The “Crypto Queen” of The U.S. Senate
Against the backdrop of businesses pivoting away from the U.S. and a major crash in altcoin markets, one Republican senator is positioning herself as a potential savior.
In a tweet on Saturday evening, Senator Cynthia Lumis stated that she is working on “a regulatory framework that will allow individuals and companies to own and trade digital assets in America.”
Sometimes referred to as the “crypto queen” of the U.S. Senate, Lumis has previously worked on the bipartisan “Responsible Financial Innovation Act,” which she co-authored with the Democratic Senator Kirsten Gillibrand.
Unfortunately, Lumis and Gillibrand’s Bill appears to have stalled in a wave of post-FTX crisis apprehension and Washington procrastination. But the current market volatility and the very real threat of a mass exodus of businesses could be just what is needed to breathe new life into their efforts.
In an interview earlier this year, Lumis revealed that the two senators were working on a new and improved version of the Bill.
She added that the issue of determining what is a commodity and what is a security has been central to their latest efforts. Rather than leaving it to regulators to make such determinations, she suggested that “meatier” legislation could prevent the kinds of lawsuits that are currently hamstringing the sector.
“We’re now proposing more statutory language, because […] Congress needs to and is ready to weigh in on some of those concepts,” she stressed.
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