Following a crackdown on crypto companies by U.S. regulators this year, including a high-profile case against the world’s largest cryptocurrency exchange Binance, crypto businesses are being forced to develop growth strategies that effectively separate them from the world’s largest economy. The strict policies of American regulators are forcing cryptocurrency companies to choose other jurisdictions, but in the long run this may affect their profits. According to Konstantinas Sizovas, co-founder of the WeeEasy ecosystem and CFO of the ASTL investment project (headquartered in Hong Kong), many “promising entrepreneurs” want to create a business in the field of blockchain and decentralized technologies in America, but do not know how to properly structure the company’s activities so that meet the requirements of legislators. Blockchain teams have to spend “time, energy, and often tens of thousands of dollars in legal fees,” he said. Young entrepreneurs are frightened by the lack of clear rules. They see public multibillion-dollar companies struggling to navigate the legal landscape and wonder what are the chances of survival for their tiny project,” says Konstantinas Sizovas. According to venture capital firm Electric Capital, while in 2018, 42% of Web3 developers lived in the United States, by 2022 the figure had dropped to 29%. Faced with the choice of “staying in America or building a dream,” more and more project founders are choosing to leave.
Reporters from The Wall Street Journal spoke on this topic with representatives of large companies and funds working in the field of cryptocurrencies and blockchain. The leaders of at least three of them confirmed that they are already focusing on growth outside the United States. Among these are the well-known Ripple Labs, Zodia Markets (a platform for trading digital assets with investments from Standard Chartered Bank) and the venture capital company Ryze Labs (formerly Sino Global), which has invested in projects such as Solana, LayerZero, Polygon or Wintermute. These are not isolated examples. Members of MakerDAO, the company behind the DAI stablecoin, recently voted to block US-based users from accessing the platform. United States citizens were not permitted to participate in some major token airdrops, including Worldcoin, or token pre-sales on Binance Laucnchpad or CoinList. Large American exchanges Coinbase and Gemini launched international trading platforms in May.
All this makes us wonder how much cryptocurrency companies can earn after American regulators radically changed the legal landscape, writes WSJ. “In the short term, we can afford to ignore the US market for now, but in the long term, everyone will lose,” said Ryze Labs founder and managing partner Matthew Graham. For several years, the cryptocurrency industry has operated in a legal gray area, allowing exchanges and other companies to provide services in virtually any country. However, a series of high-profile collapses of cryptocurrency companies last year precipitated the introduction of serious restrictions by US regulators.
In June, the US Securities and Exchange Commission (SEC) brought charges against both Binance and Coinbase, which ranks second in the world by trading volume and is the largest crypto exchange in the US. At the beginning of the year, the service sued the American crypto exchange Gemini in connection with its Earn program, which allowed users of the site to receive interest from lending their tokens. The SEC then fined the Kraken exchange $30 million, equating its staking service with earnings on unregistered securities. Later, the department banned Paxos from issuing the BUSD token, which at that time was considered the official stablecoin of the Binance exchange and was second in capitalization only to USDT from Tether and USDC from Circle. At the end of August, the SEC first brought charges of illegal sales of non-fungible tokens (NFTs). At the beginning of the week, David Hirsch, head of the crypto assets and cyber technologies division at the SEC, on behalf of the regulator, threatened new lawsuits and investigations, including against decentralized (DeFi) financial projects.
While the US is cracking down, regulators in other countries are opening up new opportunities. Hong Kong authorities are promoting the city as a global hub for digital assets, despite a ban on crypto businesses in mainland China. Singapore has begun issuing licenses to cryptocurrency companies again and recently issued guidelines for regulating stablecoins. Dubai created a cryptocurrency-focused regulator last year, and many cryptocurrency companies have already opened offices there.
Against this background of pressure on the crypto industry, one of the legitimate forms of investing in cryptocurrency mining is the ASTL investment project, which allows investors to have the opportunity to directly invest fiat and cryptocurrency assets into stable passive income, which obviously exceeds inflation expectations and is not subject to any sanctions, blocking or confiscation. The ASTL project is a simple and elegant solution for potential investors – an investment in the development of the real sector of a diversified portfolio of cryptocurrencies, with a fairly high APR (up to 14%) with payments in stablecoin (USDT) and the possibility of a full return on investment through the subsequent sale of accrued ASTL tokens on leading crypto exchanges . Details can be found at https://astl.world